Finance - Three Misc. Problems

3. (TCO E)
Division Asset
Beta Next Period's Expected Free Cash
Flow ($mm) Expected
Growth
Rate
Oil Exploration 1.4 450 4.0%
Oil Refining 1.1 525 2.5%
Gas and Convenience Stores 0.8 600 3.0%
The risk-free rate of interest is 3% and the market risk premium is 5%.
1) Which is the cost of capital for the oil exploration division closest to?
A) 6.0%
B) 7.0%
C) 8.5%
D) 10.0%

4. (TCO B)
You expect CCM Corporation to generate the following free cash flows over the next 5 years.
Year 1 2 3 4 5
FCF ($ millions) 25 28 32 37 40
Following Year 5, you estimate that CCM's free cash flows will grow at 5% per year and that CCM's weighted average cost of capital is 13%.
Which is the enterprise value of CCM Corporation closest to?
A) $396 million
B) $290 million
C) $382 million
D) $350 million

5. (TCO D)
Which is the standard deviation of the returns on Stock A from 2000 to 2009 closest to?
Year End Stock A Realized Return (R - R) (R - R)2
2000 46.3% 29.85% 0.0891023
2001 26.7% 10.25% 0.0105063
2002 86.9% 70.45% 0.4963203
2003 23.1% 6.65% 0.0044223
2004 0.2% -16.25% 0.0264063
2005 -3.2% -19.65% 0.0386123
2006 -27.0% -43.45% 0.1887903
2007 27.9% 11.45% 0.0131103
2008 -5.1% -21.55% 0.0464403
2009 -11.3% -27.75% 0.0770063
A) 33.2%
B) 16.4%
C) 31.5%
D) 11.0%