1. A firm has a current dividend (just paid) of 4 $ which is expected to grow indefinitely at 4%. If the current stock price is 118 $, what is the market capitalization rate (implicit cost of equity) based on the constantgrowth DDM?

2. You are thinking of investing in Iberdrola (Spanish utility). The current stock price is 10.94 Eur per share. If the expected EPS for the end of this year is 0.56 and the cost of equity for the company is 5.9%, what is the PVGO? How much does the PVGO represent over the current price? Does the result make sense in relation to the sector to which the stock belongs?

3. Imagine we have the following information on The Estee Lauder Companies stock: ROE of 12%, current EPS 4.78$, and current DPS 1.66$. The risk-free rate in the USA is 1.20%, the market risk premium is 5.95% and the beta of the stock is 1.2. If we assume plow back ratio will remain stable, what will the implied PE ratio be?

4. We have the following information on SAP: EPS expected for the end of the year is 3.82 , ROE is 18% ratio, the payout is 41% and the implied cost of equity (market capitalization rate) is 11.90%, please find the value of the stock using the Constant growth model? Using that fair price, please find the PVGO for the company. Find the PVGO as a % and relate it to the industry to which the company belongs.

5. The company has the following info, please choose only the appropriate information and calculate FCFF.

Millions	2019
EBIT	24.300
Net Profit	12.320
Capex	2.650
Tax rate (in %)	27,0%
Depreciation and amortization expense	2.800
EBITDA	27.100
Change in Working cap	477
Interest expense	380
Increase in Net Debt	2.287

6. Looking at the equations studied, explain if the following statements are true, false, or uncertain from a theoretical point of view:

- A. with all else held constant, a firm will have a higher P/E if its beta is higher

- B. P/E will tend to be higher when ROE is higher (assuming Plowback is positive).

- C. A company has achieved in the past 25% ROE if the ROE is expected to fall abruptly to 12% from lower opportunities of investment in the next periods; will decide to decrease its payout ratio.

7. Nestle is expected to pay at the end of the year a DPS of 2.42 which expect to continue to grow at a constant growth rate of 1.5%. The risk-free rate is 0.75% and the expected return on the market is 6.75%. The current price of the stock today is 117$. If we use a constant growth approach and CAPM approach for Ke, please find the implied BETA of the stock (Nestle). That this Beta make sense with the sector? How would you categorize the sector? Industry stage? Key drivers and risks of the sector?

8. We are at the beginning of 2020, and we have the following information on the stock of Colgate Palmolive. Please, find the value of the stock using a DCF valuation and make an investment recommendation:

Current price: 79 $ Number of shares 858 Million

The market value of Net Debt 5,220 million $

Consensus analyst target price: 88 $

The company has a WACC of 5.5%.

FCF 2020 is expected to be 2,620 Million $, FCF 2021 is expected to be 2,830 Million $, FCF 2022 is expected to be 2,925 Million $ and FCF 2023 is expected to be 3,080 Million $.

Constant growth after the year 2023 of 2%