The company XYZ S.A. has the following assets: Stocks: Expect to receive cash dividends of $ 750 annually indefinitely. Required yield: 8% Land: expected to sell for $ 235,000 within 6 years. Required yield 9% Machinery: Expect to receive a cash flow of $ 15,000 at the end of year 1, $ 9,500 at the end of year 3, and $ 35,000 at the end of year 5 from the sale of the machinery. Required yield 20% Calculate the value of each asset with the basic valuation model.

Financial Management: Theory & Practice
16th Edition
ISBN:9781337909730
Author:Brigham
Publisher:Brigham
Chapter21: Dynamic Capital Structures And Corporate Valuation
Section: Chapter Questions
Problem 9P
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The company XYZ S.A. has the following assets:
Stocks: Expect to receive cash dividends of $ 750 annually indefinitely. Required yield: 8%
Land: expected to sell for $ 235,000 within 6 years. Required yield 9%
Machinery: Expect to receive a cash flow of $ 15,000 at the end of year 1, $ 9,500 at the end of year 3, and $ 35,000 at the end of year 5 from the sale of the machinery. Required yield 20%
Calculate the value of each asset with the basic valuation model.

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