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Exhibit 13 From Year 2013 Onward Growth in FCFE Is Expected to

question 49

Multiple Choice

Exhibit 13.2
Use the Information Below for the Following Problem(S)
At the end of the year 2004 the Office Equipment Industry had free cash flow to equity (FCFE) of $2.50 per share. The following annual growth rates in FCFE are projected:
$\begin{array} { c c } \text { Year } & \text { Grapth Rata } \\\hline 2005 & 10 \% \\2006 & 15 \% \\2007 & 20 \% \\2008 & 25 \% \\2009 & 20 \% \\2010 & 15 \% \\2011 & 10 \% \\2012 & 7 \%\end{array}$
From year 2013 onward growth in FCFE is expected to remain constant at 5% per year. The industry has a beta of 0.90 and the current industry price is $105. Currently the yield on 10-year Treasury notes is 5% and the equity risk premium is 4%
-Refer to Exhibit 13.2.Calculate the present value now (Year 2004) of FCFE during the period of declining growth (that is for years 2009 to 2012) .

Understand legal capacity and its implications on the ability of minors to enter and disaffirm contracts.

Recognize and differentiate between contracts that are void, voidable, and unenforceable under various circumstances including those involving minors, intoxication, and mental illness.

Identify the types of contracts deemed necessary for minors and the special protections afforded to them under the law.

Comprehend the variations in legal responsibility and the ability to contract across different jurisdictions, including a comparative understanding of Chinese law regarding minors.

Definitions:

Price

The financial value forecasted, demanded, or handed over as compensation for an item.

Quantity

The amount or number of a material or immaterial good that is considered as a unit or an aggregate.

Price Ceiling

A legal maximum price set by government on certain goods or services, intended to prevent prices from becoming too high.

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium for a good or a service is not achieved, leading to a misallocation of resources.