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[answered] a. Suppose you believe KCP's initial revenue growth ra


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Please do not give me some generic answers from the website as the sales here is $510.3million, not $518million


a. Suppose you believe KCP's initial revenue growth rate will be between 4 % and 11 % (with growth slowing in equal steps to 4 % by year 2011). What range of share prices for

 

KCP is consistent with these forecasts???(Select the best choice below.)

 

A. The range of share prices consistent with these forecasts is from $ 26.94 to $ 21.11.

 

B. The range of share prices consistent with these forecasts is from $ 19.46 to $ 24.10.

 

C. The range of share prices consistent with these forecasts is from $ 18.57 to $ 26.12.

 

D. The range of share prices consistent with these forecasts is from $ 24.42 to $ 23.59.

 

b. Suppose you believe KCP's EBIT margin will be between 7 % and 10 % of sales. What range of share prices for KCP is consistent with these forecasts (keeping KCP's initial revenue growth at 9 % with growth slowing in equal steps to 4 % by year 2011)???(Select the best choice below.)

 

A. The range of share prices consistent with these forecasts is from $ 26.94 to $ 21.11.

 

B. The range of share prices consistent with these forecasts is from $ 24.42 to $ 23.59.

 

C. The range of share prices consistent with these forecasts is from $ 19.46 to $ 24.10.

 

D. The range of share prices consistent with these forecasts is from $ 18.57 to $ 26.12.

 

c. Suppose you believe KCP's weighted average cost of capital is between 10 % and 12 %. What range of share prices for KCP is consistent with these forecasts (keeping KCP's initial revenue growth and EBIT margin at 9 % with growth slowing in equal steps to 4 % by year 2011)???(Select the best choice below.)

 

A. The range of share prices consistent with these forecasts is from $ 24.42 to $ 23.59.

 

B. The range of share prices consistent with these forecasts is from $ 18.57 to $ 26.12.

 

C. The range of share prices consistent with these forecasts is from $ 19.46 to $ 24.10.

 

D. The range of share prices consistent with these forecasts is from $ 26.94 to $ 21.11.

 

d. What range of share prices is consistent if you vary the estimates as in parts (a), (b), and (c) simultaneously? That is:

 

Case 1

 

Case 2

 

Revenue growth rate

 

4 %

 

11%

 

EBIT margin 7% 10%

 

WACC

 

10 % 12%

 

(Select the best choice below.)

 

A. The range of share prices consistent with these forecasts is from $ 19.46 to $ 24.10.

 

B. The range of share prices consistent with these forecasts is from $ 26.94 to $ 21.11.

 

C. The range of share prices consistent with these forecasts is from $ 24.42 to $ 23.59.

 

D. The range of share prices consistent with these forecasts is from $ 18.57 to $ 26.12.

 


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