#1 Van Buren, Inc., currently pays $2.24 per share in dividends on its common stock. Dividends are expected to grow at 7.00 % per year forever. If you require a 13.00 % rate of return (i.e., the discount rate) on this investment, what value would you place on a share of Van Buren common stock? Assume that the current dividend was just paid. Answer format: Currency: Round to 2 decimal places # 2 Bad Investment Incorporated has "promised" investors to pay a $6.00 per year dividend in perpetuity. If investors want a 21.00 % return on this stock based on the risk, what intrinsic value of the stock today? Answer format: Currency: Round to: 2 decimal places. #3 After finishing your first finance class, you decide to start your own investment plan. Your first stock to purchase is Walgreen's (WAL). You are confident enough to project next year's dividend as $1.00. However, you are unsure of future dividends, so you just assume they will grow at 5.00 % per year going forward each year. If you want a 15.00 % return on your investment, what value do you place on the stock today? Answer format: Currency: Round to: 2 decimal places # 4 An analyst has been following American Dream stock. He projects the following dividends for the next three years: YEAR 1 3 Dividend $2.20 $1.61 $3.18 The analyst notes that American Dream stock has a required return of 10..30%. The analyst projects that dividends will grow at a constant rate of 5.00 % per year after year 3. What is the projected selling price for the stock at the end of year 3? Answer format: Currency: Round to: 2 decimal places #5 An analyst has been following American Dream stock. He projects the following dividends for the next three years: YEAR 2 3 Dividend $1.61 $2.20 $3.18 #5 An analyst has been following American Dream stock. He projects the following dividends for the next three years: 1 YEAR $3.18 $2.20 $1.61 Dividend The analyst notes that American Dream stock has a required retun of 10.30 % . The analyst projects that dividends will grow at a constant rate of 5.00 % per year after year 3. What is the current price of the stock if his assumptions are correct? Answer format: Currency: Round to: 2 decimal places #6 Caskey Inc. is experiencing a period of growth. Dividends are expected to grow at a rate of 14.00% for the next two years and 5.00 % thereafter. Yesterday the corporation paid a dividend of S1.11. If the required rate of return is 13.00% , what is the intrinsic value of the stock? Answer format: Currency: Round ta: 2 decimal places. # 7 CPJ Industries has a share price today of $22.46. If CPJ is expected to pay a dividend of $0.52 per share this coming year, and the stock price is expected to grow to $22.75 by the end of the year. What is CPJ's expected dividend yield? Answer format: Percentage Round to 2 decimal places (Example: 9.24 % % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924)) #8 Aldean Corporation has shares of stock trading at $51.13 today. The company has 1.00 million shares outstanding. Earnings for the company last year were $6.00 million. Construct a P/E multiple for the company Answer format: Number: Round to: 2 decimal places. #9 Shack Diesel Company has stock trading today at $40.87 per share. The company just paid a $2.38 per share dividend. Kenny Smith, an analyst, believes investors should seek a 12.00 % return to hold the stock. If we value Shack Diesel using the constant growth model, what dividend growth rate would justify these assumptions? Answer format: Percentage Round to 2 decimal places (Example: 9.24 % , % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924)) #10 Crowe Industries trades at $20.47 per share. The company just paid a $1.26 per share dividend. Robert Knight, an analyst, estimates that dividends will grow at 4.09 % per year going forward. If we value Crowe Industries using the constant growth model, what implied return will investors receive at the current price? A E E B IU. #11 You own a share of stock in Macho Man Incorporated. The company is expected to pay a dividend of $1.56 per share next year. As an investor, you want a 11.00 % annual return on Macho stock. (you can assume that the price of a share is the PV of its dividends.) What is the value of a share of Macho Man stock today if the company pays the same dividend forever? #12 After finishing your first finance class, you decide to start your own investment plan. Your first stock to purchase is Walgreen's (WAL). After careful analysis, you predict the following payoffs for owning Walgreen's stock over the next four years: YEAR 1 2 3 4 Dividends $1.00 $1.25 $1.50 $1.50 Selling Price $50.00 If you require a 20.00 % retum on your investment (a little high...), what price are you willing to pay today for a share of Walgreen's? #13 Rusty Nails Bar & Grill reported free cash flow of $782,000.00 last year. Free cash flows are projected to grow by 2.50 % annually. For the same period, the firm reported marketable securities of $9,000.00 and $750,000.00 in outstanding long-term debt. The firm's reported shareholder equity totaled $300,000.00. The firm currently has 100,000.00 common shares outstanding and the cost of capital is 14.00 %. What is the value of operations for Rusty Nails Bar & Grill? #14 Rusty Nails Bar & Grill reported free cash flow of $782,000.00 last year. Free cash flows are projected to grow by 2.50 % annually. For the same period, the firm reported marketable securities of $9,000.00 and $750,000.00 in outstanding long-term debt. The firm's reported. shareholder equity totaled $300,000.00. The firm currently has 100,000.00 common shares outstanding and the cost of capital is 14.00 % . What is the total corporate (firm) value for Rusty Nails Bar & Grill? #15 Rusty Nails Bar & Grill reported free cash flow of $782,000.00 last year. Free cash flows are projected to grow by 2.50 % annually. For the same period, the firm reported marketable securities of $9,000.00 and S750,000.00 in outstanding long-term debt. The firm's reported shareholder equity totaled $300,000.00. The firm currently has 100,000.00 common shares outstanding and the cost of capital is 14.00 % . What is the intrinsic value of common equity for Rusty Nails Bar & Grill? Answer format: Currency: Round to 2 decimal places A EE BIU