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Linkedina has a ROE of 20% that is expected to stay like that forever. It currently reinvests 90% of its earnings in the growth of its business but it is expected that after the end of year 3 the retention ratio will be 20% and stay there forever. The firm's stock has just paid a dividend of 5 AUD. Assume the opportunity cost of equity capital is 14%. What is your estimate of the value of a share of the firm? Choose the closest number unless you think it cannot be determined. Question 29 Not yet answered Marked out of 1.00 P Flag question Select one: O a. 23.18. O b. 49.72. O c. 69.04. O d. 337.80. O e. It cannot be determined from the data. Rio Sinto has a book value of equity of 1500 and a book value of debt of 800. It holds excessive cash on its balance sheet of 1000. Its net operating income is 150. The interest rate on its debt is 10% and the corporate tax rate is 40%. What is your estimate of the return on capital (RoC) in the firm (correcting for excessive cash)? Choose the closest number unless you think it cannot be determined. Select one: a. 15.96%. O b. 14.43% O c. 11.54% O d. 8.93% O e. It cannot be determined from the data. Which of the following multiples is not consistently defined? Select one: a. Price / Earnings. b. Value / EBIT. c. Price / Book value of equity. O d. Value / Book value of assets. Oe. Price / EBITDA. A firm has the below history of expenses in R&D: Year 0 (Current) -1 -2 -3 4 -5 R&D expense 450 300 250 350 400 150 Assume a life for R&D investments of 3 years. In the current year, the firm had an EBIT of 600, a Net Capex of 220, a pre-tax interest expense of 70, a tax rate of 30%, a book value of equity of 1400, a book value of debt of 2000 and no cash. The corrected ROC and adjusted NOI are respectively: Select one: a. 13.79% and 570. b. 13.79% and 420. O c. 24.42% and 570 O d. 12.35% and 521. O e. None of the above. Rio Sinto had a ROE this year of 10% and you expect its ROE next year to be 12% (both on old and existing projects). What should be the firm's growth in earnings next year? Choose the closest number unless you think it cannot be determined. Select one: O a. 22.4% O b. 8% O c. 3.18% O d. 2.4% O e. It cannot be determined from the data

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