1. A share of common stock has just paid a dividend of $2.00. If the expected long-run growth rate for this stock is 5%, and if investors require a 13% rate of return, what is the price of the stock?

2. Company A just paid a dividend of $2.00. The risk-free rate of return is 1% and the market risk premium is 12%. The beta of the company's stock is 1.20. If you know the company's dividend is growing at a constant rate of 3%, What is the intrinsic value of the company 5 years from today?

3. The EBIT of a firm is $244, the tax rate is 40%, the depreciation is $77, capital expenditures are $72 and the increase in net working capital is $35. What is the free cash flow to the firm?

4. You forecast a company to have a ROE of 8%, a dividend payout ratio of 21%. Currently the company has a price of $30 and $4 earnings per share. What is the company's PEG ratio based on market price?

5. A company has a profit margin of 14%, an asset turnover ratio of 1.7, and an equity multiplier ratio of 1.65, both the tax burden and the interest burden are at 1, if the profit margin increases to 16% but the asset turnover ratio decreases to 1.1, what will be companys new ROE? Put answers in decimal places instead of percentage.

6. ART company has come out with a new and improved product. As a result, the market projects an ROE of 25% for the company, and we know the company will maintain a plowback ratio of 0.20. The company's earnings this year is $3 per share and the current market price is $35. If firms with similar risks in the industry have a PE ratio of 20 with an estimated earnings growth rate of 12%, is ART company overvalued or undervalued based on PEG approach?

	A.	The ART company is overvalued because it has a PEG ratio that equals to 1.42
	B.	The ART company is overvalued because it has a PEG ratio that equals to 2.22
	C.	The ART company is undervalued because it has a PE ratio that equals to 11.11
	D.	The ART company is overvalued because it has a PE ratio that equals to 22.15
	E.	The ART company is undervalued because it has a PEG ratio that equals to 1.42
	F.	The ART company is undervalued because it has a PEG ratio that equals to 2.22