Level I

Question about the value of the firm and project

Hello All,

I am a little confused about the market capitalization and the value of the firm. Let’s say the company is 100% equity-financed with market cap = $100.

Moreover, if I undertake a new project with initial cost C0= -$100, and PV of future cash flows = $150. NPV of the project = $150-100 = $50.

Computing Value of the project (Enterprise value)

Hello All,

Let’s say that the following cash flows of the project:

Cf0 = -100

CF1 = 45

CF2 = 65

CF3 = 90

When we calculate the value of the firm, why do we calculate the PV of all future cash flows? Why don’t we subtract the investment required at t=0? I am curious. Can someone please guide me?

In above example, I got Value = 163.81 @ 9.51% WACC.

Please help.


Calculate ROE

equity = $1, purchase assets = $3.
ROA (return on assts) = 8%
Borrow rate = 5%
Leverage ratio 3:1
calculate ROE (return on equity)

can you give the explanation for the solution.

Is the highest MPS 70% ?

I heard from somewhere that the MPS is the top one percent’s average times by 0.7. Is this officially stated in anywhere or is it just a rumour/estimate?

Thanks guys,

Proctor told me I couldn't write in my book or I would be in violation, help please

A proctor stopped me in the morning session and told me I couldn’t write in my test book and that I had to erase everything or else I would be disqualified…I was shocked as had never heard of this and asked him where I was supposed to do scratch work and he said in my calculator. He came back 30 min later after another student complained and said “oh the rules have been updated you can write in your book.”   Along with another student who this happened to, we made a formal complaint to the head proctor who was very apologetic.

Kaplan Schweser Classes for CFA 1?

So I was signed up for the CFA 1 in Dec, in October I moved jobs then I moved apartments, so my studying was a bit off.  I took the test, probably failed but figured hell why not just take the test to see the format and you never know I “might” have passed.  

Anyways was thinking if I failed I would sign up to take the test in June 2015 (No issues there right?  Meaning if I failed in Dec 2014 I can sign up for CFA1 in June 2015?).  I am also thinking about signing up for the Kaplan Schwester Classes its like 15 weeks, 1 class a week for 3 hours a class.  

Entered the CFA Institute ID wrongly in the Answer Sheet. Am i Srewed?

The answer sheet for the CFA Exam had a section for “CFA Institute Id”.

I entered my ID in the Boxes correctly. but while shading the ovals, i shaded one of the number in the CFA Institute ID wrongly. Instead of “1”, i shaded “0”. :(

I found that i did this mistake only when the proctor took away the answer sheet at the end of the session. After that they wouldnt give back the sheet. :-O

when to start studying for level 2 if you aren't sure about passing

I took the exam last saturday and I think I did okay.

But I am also worried that I may fail.

If I pass, I plan to register for the 2015 lv2 exam. Since the results are coming out late January, I think I might not have enough time to study for lv2 during the 4months period. Is there anyone experiencing same problem?

thanks in advance


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