Question

Answer the following questions:

2.)If national Healthcare Corp,reported earnings per share of $ 5.82 in 2000 and $ 21.26 in 2011,at what annual rate did earnings per share grow over this period?

8.)Times are through for Anger Biotech, Having raised $ 85 million in an initial public offering of its stock early in the year, the company is poised to launch its product. If Auger engages in a promotional campaign costing $ 60 million this year, its annual after tax cash flow over the next five years will only be $ 700,000.If it does not undertake the campaign, it expects its after tax cash flow to be minus $ 18 million annually for the same period. Assuming the company has decided to stay in its chosen business, is this campaign worthwhile when the discount rate is 10 percent? Why or why not?

1.) Is each of the following statements true or false please explain ?
a.)Using the same rish adjusted discount rate to discount all future cash flows ignores the fact that the more distant cash flows are often riskier than cash flows occurring sooner.
b.)The cost of capital or WACC is not the correct discount rate to use for all projects undertaken by a firm.
c.)If you can borrow all of the money you need for a project at 6% the cost of capital for this project is 6%?
d.)The best way to estimate the cost of debt capital for a firm is to divide the interest expense on the income statement by the interest bearing debt on the balance sheet.
e.)One reliable estimate of a privately held firms equity beta is the average of the equity betas of several publicly held competitors.

8.)What is the percent value of a cash flow stream of $ 1,000 per year annually for 15 years that then grows 4 percent per year forever when the discount rate is 13 percent.?

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