Calculate the pe and pb ratios for major regional airlines

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Questions -

Q1. Based on your forecasts, calculate free cash flow to equity, free cash flow to the firm, andabnormal earnings for the next five years.

Q2. Use CAPM model to estimate Qantas' cost of equity. Then calculate WACC.

Q3. Assume long-term growth rate of 2% after year 5, calculate the terminal value and estimatethe fundamental value per share using discounted free cash flow models and discountedabnormal earnings model.

Q4. Calculate the PE and PB ratios for major regional airlines. What would be Qantas' shareprice if it had the average PE or PB ratios?

Q5. Discuss possible reasons why your estimates of Qantas' fundamental value may differfrom its share price.

Reference no: EM132453303

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