1. Assumetherealrateofreturnintheeconomyis2.5%,expectedrateofinflationis4%,andtheriskpremiumis5.9%,whataretherisk-freerateandyourrequiredreturn?

2. Walgreens stock went from $25 to $28 last year. Walgreens paid a 50 cent dividend. What is your holding period return (HPR)?

3. Assume you invest $5,000 today in an investment that promises to return $9,000 in exactly 10 years. If your minimum required return is 9%, would you recommend this investment?

4. Avila Industries has $7.5 million in assets, no preferred stock, and total liabilities of $3 million. There are 3 million shares of common stock outstanding. What is the book value per share?

5. Avila Industries has $7.5 million in assets, no preferred stock, and total liabilities of $3 million. There are 3 million shares of common stock outstanding and the stock is selling for $5.25 per share. What is its price to book value?

6. Quinn Corporation produces $2 million in profits with $28 million in sales. It has total assets of $15 million. Calculate the net profit margin and return on assets (ROA)?

7. A firm with a beta value of 1.5 has a required rate of return of ________, if the risk-free rate is 10% and the market rate of return is 15%?

8. If a firm pays a $2 dividend and that is expected to remain constant, what is the value of the common stock, if the firms required rate of return is 16%?

9. If the next periods dividend is $3, the required return is 12%, and the growth rate is 7%, what is the firms stock price?