MATH 246 Quiz: Quiz 6 Solutions Fall 2009
14 Mar 2019
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The answers on this exam are entirely my own work. I neither gave nor received any aid while taking this exam. You have three hours to take this exam. Please remember to write your name legibly on every page. This exam will be graded out of 200 points. The number in parentheses for each question is the amount of points assigned to the question. The exam has seven questions and 18 pages, including this page and a page of scratch paper at the end. You are an entrepreneur with a potential project. The following spreadsheet reports expected unlevered cash flows for the project. This project has the same economic risk as the unlevered cash flows of widgets, inc. (hereafter called wi. ) The market value of wi stock is mm. The current market value of what wi owes debtholders is mm. Wi attempts to keep the ratio of its net debt to equity constant over time.
