3. One year ago you purchased a share of stock for $27.69. Today it is selling for $26.42. What is the Holding Period Return on this investment for the year? What would be the Holding Period Return if the firm had paid a dividend of $1.90 per share during the year? 4. You are considering the purchase of a share of stock. In the most recently reported fiscal year Earnings per Share (EPS) were $2.15. You expect earnings to grow at 0.85% per year into the future, and you require a return of 7% on the investment. Using a Gordon Growth Model, what is a reasonable estimate for the share price? 5. You are considering the purchase of a stock with a Beta of 0.95. The current yield on T-Bonds is 1.35%, and you expect the long-term excess returns on the Market Portfolio to be 6.50%. Use the Capital Asset Pricing Model (CAPM) to estimate the long-term return on this stock 6. Consider four projects, which you expect to generate the following cash flows Year Project Project B Project C 0 (300,000 (3,000 300,000) 150,000 150,000 150,000 (300,000) 120,000 150,000 190,000 1315,000 2 25,000 Your required return on all of the investments is 6%. For each project estimate the Payback Period, Internal Rate of Return (IRR), and Net Present Value (NPV). If these projects are independent which should you undertake? If the investments are mutually exclusive which should you accept? 7. A firm has a debt-to-asset ratio of 25% (based on the market value of assets). The firm's bondholders require a return of 3.15%, and the equity holders require a return of 8.50%. The firm's marginal tax-rate is 35%. Estimate the firm's Weighted-Average-Cost-of-Capital (WACC)