Calculate companies cost of capital in emerging nations

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Reference no: EM132888284

Respond to the following

1. How can we calculate companies cost of capital in emerging nations, especially when there is no state bond which we could take as a reference?

2. How can an industrial company inflate the value of its inventory so as to reduce net income and the taxes it has to pay that year?

3. According to the valuation method based on tax shields, the value of the company (vI) is the value of the unleveraged company (Vu) plus the value of the tax shields (VTS). So does the value of the company increase if I a call my bank and tell them to charge me double the interest?

4. I cannot seem to start valuation .in order to calculate E+D=VA(FCF;WACC) I need the WACC and in order to calculate the WACC I need D and E .where should I start?

5. Does the book value of the debt always coincide with its market value?

6. Is the Free Cash Flow (FCF) the sum of the equity cash flow and the debt cash flow?

7. What is NOPAT (Net Operating profit After tax)?

8. What is EBITDA(Earning before interest ,Taxes, Depreciation and Amortization)?

9. I do not understand the meaning of working capital requirements, I think it should be similar to working capital (Current Assets-current liabilities).Am I right?

10. Why can we not calculate the required return (Ke)from the Gordon- Shapiro model(p0= DIV0(1+g)/(ke-g) instead of using the CAPM ?As we know the current dividend (Div0)and the current share price(p0),we can obtain the growth rate of the dividend from the formular g=ROE(1-p)/(1-ROE(1-p),p being the payout.

Reference no: EM132888284

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