Quiz 5

current stock price 1.2 4,44%

expected dividend yield: 3
=

I =

pershave 27
current stock price (annual)

Capital gains yield

(110) 3326 = 27
=

-expected dividend
value share of
Stock (equity CO2- dividend growth rates" (1 -

6%)
$64,3
=
 dividend yield:12%-7% 5%
Growth rate:cost of
equity capital
=
-

dividends

-Dirded nextyearrateinacratae
in
-30
price of share

Growth rate 5.6%

=>
=

rate
growth

I g
= retention rate return on new investment

-2,15% 9.55
=

stock
Go price of
Go
Dg for nextperiod
=

-
Dive-estimated
dividends
r equity costof capital
12
=
-

rate
=81.6%,
g:growth
(12".
-

9.55)
 1.4 1.5 28
$25.65
10%)2*(1-
-
=

1-10% (1 +
10%.

:"To"25"

dividend,(+ perpetuity) perpetuity

expected share price: -

cost
of capital
2.3
=
x(1 6%) +

- 6" 16.5025
=

16%
 2.65
G:dividendmentyear:2.5x(1 6%)
+ =

-65
dividend next year
share price:
cost
of equity
-

growth rate
10.7%
=) y =

dividend
C:growth rate:equity cost of capital --

share price
 Quiz 6

value of the office:15%, +45 554 15 30%, x20

+ x
+

$21 mill
=

return ISE, RR, +1SEg+ RRa+1SEs xRRg

expected =

0.55 0.2 0.2

0.13 +

=0.25 0.08
+

- x
x

=
15.6%

A:$6,700
=)
= 4500
B:$17,500
2: $9,300

Portfolio weight of
stock -50 1.84%
=
 Stock B 97000-7820 =

$29180
=

Portfolio A=8=21,14"
18,86%
=
2
Portfolio B =

expected return onthe f1,144, = x 11,7% 8,3%x78,86%

-

portfolio:9.09%

I -

W ↑

value
of stock A: 22 110
x 2420
=

B 35 450:15758
Total value 34820
=
x
=
=

15230
2:49 270 + =

D 19 180 3420
= x =
value stock ( 67,000-17,500 21,200 28,500$
of
-

= =

28,500,a
E(R)1 14.8% 17,500,18.3% 21,200,11.6%
= +

= +

67,000
67,000
67,000

15.06%
n
=

=>

expected return of stock A 7.8%x0.1 0.75 9.1% 0.15 11.8% 0.09375= 9.375%
+ =
=
+
x x

15.4%,x0.75 +( 12.3%) 0.13 0.12065 12.065%.

expected return of stock B 23.6%, x0.1
=
-
+ x =

13.07S:
19.7% 0.75 6.4% 0.15 0.13075
=

expected return of stock 2 18.4%x0.1

x
+
x =

13.875%,25% 10.9725%
=

12.065%. 25%.
expected return on portfolio:9.375;.50%
+

x
=

a +
 10.92 33,600 1.34 x16,800 0.75 x21,700 1.46 x4,300)
+

+ +
+

Portfolio beta I =0.99

(33,600 + 16,800 + 21,700 4,900)
+
 value of
Weight Lautfolio Beta Weighted average
portfolio,$)
in

42,000 1.3 0.8

Existing 42,000
x

=0.8
52,008 1.3
1.04
=

10,000: B 0.2
0.2
B
x

Addition 18,000 52,000 1.15

=
-
1.04 0.11
=

Total 52,000 1 1. 15

B 0.2 0.11: B 0.53

+
=
=
 280 60 $16,800
Value of ABT x
=

LCW 250 40 $10,000

of
=

Value
= +

BLL:120 50 $6,000
of
=

Value
x

total $32,800
=

51.2%
ABT 16,900,
100
=

Weightof
=

32,800
30.5%
LOW 10,000,100:
weight of
=

32,800
BLL 6,000 100
18,3%
Weight of
=

=
x

32,800

Total value $40,000

of stock 15,000 27,000
=
+

27,000,11%=13.275%.
Expected return on portfolio:13,000 18%
x
+

40,000 40,000
 By 1.18 x78% 1.35 30%.
=
+
+ 1.231
=

1.252
B 1.12 45%.
=
+
1.36 55%.
+ x
=

1) 141
4%. 1.252 (12%
(km-RF)
-
=

Rr
x

Re R
=

=
+

1.7875,0.3 0.35
0.55
x

g1
+

BiteVola,corr=14%,0.8:1.4 B=
+

RM 8%

Bwo= 22%,0.65 1.7875

=

8%
0.35
PRM
I 10.4
=

=
 -4%) 14.88%
b5 17%x0,8 1.36 Rgii 4%. 1.36 (12%.
=
=
-

=
=

15.44%
1,431121 2%):
101
-

,
4".
0.65=1.43 Rswo
-

Bwo - =

(121-4%) 8.16%
=

+0.59
RsaM=4.
BRM:+0.4
0.32 =

1.36+0.2 1.43 0.3 0.32 0.5 0.961

=

Bit 17x0.8 1.361

+ + +
=
+

=
0.961(12% M. 1
Rgp 4%. 41)
+ -

0.65:1.43
=

Bwo=

0.4
0.32
=

13%
BRM =

10%
x
interest 250,000
=
x 7.25%. -$18, 125

EBIT EBIT -18,125

=

=> EBTT
$72,500
=

60,000 45,000
 turnover:COGS
Inventory = 1.5 times
=

average inventory
365
average number
of inventory days outstanding: inventory turnover.3:281 days

....

365,
-
3%=
*

20G9
Inventory turnover:
inventory 548=7.71
=
time

365
Inventory days= 7. El
=

47 days