31/03/2024, 00:06 作业详情

作业详情

一. 单选题（100分）
Session 3: Post Class tests
题量: 5 满分: 100 智能分析 60分 1 2 3
作答时间: 03-17 10:39 至 04-01 08:50

一. 单选题（共5题，100分）
1. (单选题)You have been asked to value the chemical division of a multi business conglomerate and have been provided with the
cash flows for the division. What discount rate would you use to discount this cash flow？

A. a. The cost of equity of the company

B. b. The cost of capital of the company
C. c. The cost of equity for the chemical business
D. d. The cost of capital for the chemical business
E. e. None of the above

我的答案: B 正确答案: D  0分
答案解析：d. The cost of capital for the chemical business. The cash flows are computed using operating
income (rather than net income) and have no debt flows (repayments of debt or new debt
issues). They are also for the chemical business.

2. (单选题)2. In valuation, your risk free has to be a long term, default- free rate. When valuing a company in US dollars, we often use
the 10- year US T. bond rate as the risk free rate. In the last few years, there have been questions about whether the US treasury is
really default- free. If you share these concerns, which of the following will you do, assuming that you are still estimating cash flows in
US dollars？
A. a. Continue to use it the 10- year bond rate the risk free rate since you have no choice
B. b. Switch to using the US treasury bill rate, since default is less likely in the short term
C. c. Estimate a default spread for the US government and reduce the treasury bond rate by that spread
D. d. Use the rate on a 10- year Swiss Government bond, denominated in Swiss francs (since the Swiss government has no default
risk)

E. e. None of the above

我的答案: C 正确答案: C  20 分
答案解析：c. Estimate a default spread for the US government and reduce the T. bond rate by that
spread. You could obtain the spread for the US sovereign CDS and net it out from the US
treasury bond rate. You cannot use as short term rate or a rate from a bond denominated in a
different currency.

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 3. (单选题)3. You are valuing a Spanish company in Euros. Which of the following would you use as your risk free rate in your
？
valuation

A. a. The rate on Spanish government ten- year euro bond (5%)

一. 单选题（100分）
B. b. The highest of the 10- year, euro denominated government bond rates (9%).
1 2 3
C. c. The lowest of the 10- year, euro denominated government bond rates (1.5%)
D. d. The lowest of the European government bond rates, which is the Swiss Government bond rate, denominated in Swiss francs
(0.75%)

E. e. None of the above

我的答案: A 正确答案: C  0分
答案解析：c. The lowest of the 10- year, euro denominated government bond rates (probably ECB or
German 10- year). The Spanish 10- year bond rate is not risk free and the Swiss government
bond is in a different currency.

4. (单选题)4. You are valuing a Peruvian company in US dollars. The Peruvian government has a CDS (Credit Default Swap) that is
trading at 1%. Which riskfree rate would you use in your valuation

A. a. The rate on a Peruvian 10- year Sol denominated bond (6%)

B. b. The rate on a Peruvian 10- year US $ denominated bond (3.5%)
C. c. The rate on a Peruvian 10- year Sol denominated bond minus CDS spread
D. d. The rate on a 10- year US treasury bond (2%)
E. e. None of the above

我的答案: D 正确答案: D  20 分
答案解析：d. The rate on a US T.Bond. If the valuation is done in dollars, the Sol rate is not the right riskfree
rate. The Peruvian dollar bond rate has default risk in it (it is trading at a higher rate than the
T.Bond)

5. (单选题)5. What would you use as your risk free rate if you were valuing a Peruvian company in Peruvian Sol? (You can still
assume that the Peruvian sovereign CDS is trading at 1%.)

A. a. The rate on a Peruvian 10- year Sol denominated bond (6%)

B. b. The rate on a Peruvian 10- year US $ denominated bond (3.5%)
C. c. The rate on a Peruvian 10- year Sol denominated bond minus the Peruvian CDS spread (6%- 1% =5%)
D. d. The rate on a 10- year US treasury bond (2%)
E. e. None of the above

我的答案: C 正确答案: C  20 分
答案解析：c. The rate on the Peruvian Sol bond, net of the CDS spread (6%- 1% = 5%). There is a small
mismatching problem since the CDS spread is in US$ terms, but there is no easy way to get the
default spread in Sol.

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