Zeta Technologies Has the Following Projections A) $21,165
B) $23,282
C) $25,610
D) $28,171
E) $30,988

question 50

Multiple Choice

Zeta Technologies has the following projections. It has no non-operating assets. Calculate Zeta's intrinsic value of equity using the FCFE model.

$\begin{array}{l}\begin{array} { l } \\ \\\text { FCFE }\\\text { Total debt }\\\text {Interest rate on debt }\\\text {Tax rate}\\\text { Long-term growth rate}\\\text { Required return on equity }\\\end{array}\begin{array} { l } \text { Cunent }\\\text { Year } & \text { Year 1 } & \text { Year 1 } & \text { Year 3 } \\NA& 1,000 & 1,200 & 1,248 \\3,000 & 3,900 & 4,290 & 4,462 \\6 \% & 6 \% & 6 \% & 6 \% \\25 \% & 25 \% & 25 \% & 25 \%\\4\%\\9\%\end{array}\end{array}$


 
 

• A) $21,165
• B) $23,282
• C) $25,610
• D) $28,171
• E) $30,988

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Definitions:

Belligerents

The parties or nations engaged in a conflict or war, often characterized by mutual hostility and aggression.

Financial Services

Industry sector including banking, investment, and insurance services designed to manage money.

British Blockade

A military strategy used by Britain, especially during the World Wars, to prevent the movement of enemy ships and goods, often by naval forces.

Transatlantic Purchases

Transactions involving the buying and selling of goods or services across the Atlantic Ocean, between Europe and the Americas.