1. A firm pays a current dividend of $1.00, which is expected to grow at a rate of 5% indefinitely. If current value of the firms shares is $35.00, what is the required return based on the constant-growth dividend discount model (DDM)?

required return %

2.

MF Corp. has an ROE of 17% and a plowback ratio of 45%. The market capitalization rate is 14%. a. If the coming years earnings are expected to be $1.60 per share, at what price will the stock sell? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

price : b. What price do you expect MF shares to sell for in four years? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

price :

3. Sisters Corp. expects to earn $18 per share next year. The firms ROE is 15% and its plowback ratio is 60%. If the firms market capitalization rate is 10%, what is the present value of its growth opportunities?

PVGO :

4. Eagle Products EBITDA is $440, its tax rate is 21%, depreciation is $27, capital expenditures are $74, and the planned increase in net working capital is $10. What is the free cash flow to the firm? (Round your answer to 2 decimal place.)

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