1.) The Amherst Company has net profits of $10 million, sales of $150 million, and 2.5 million shares of common stock outstanding. The company has total assets of $75 million and total stockholders equity of $45 million. It pays $1 per share in common dividends, and the stock trades at $20 per share. Given this information, determine the following: Amhersts EPS. Amhersts book value per share and price-to-book-value ratio. The firms P/E ratio. The companys net profit margin. The stocks dividend payout ratio and its dividend yield. The stocks PEG ratio, given that the companys earnings have been growing at an average annual rate of 7.5%.

2.) We examined nine stock valuation procedures: Zero-growth DVM. Constant-growth DVM. Variable-growth DVM. Free cash flow to equity approach. Expected return (IRR) approach. P/E approach. Price-to-cash-flow ratio. Price-to-sales ratio. Price-to-book-value ratio. a.) Which one (or more) of these procedures would be appropriate when trying to put a value on: A growth stock that pays little or nothing in dividends? The S&P 500? A relatively new company that has only a brief history of earnings? A large, mature, dividend-paying company? A preferred stock that pays a fixed dividend? A company that has a large amount of depreciation and amortization? b.) Of the nine procedures listed above, which three do you think are the best? Explain. c.) If you had to choose just one procedure to use in practice, which would it be? Explain. (Note: Confine your selection to the list above.)