4 EXHIBITS:

Company Valuation Metrics CAPM Metrics of Nielson Corporation Market Risk Free Rate 6% Market Interest Rate 10% Company Beta (B) 1.23 Stock Prices Nielson Corporation Stock Prices January 1, 20X3-June 30, 20X3 High Low 180-day Average January 1, 20X3 $34.69 $32.32 $32.65 March 31, 20X3 $38.63 $36.45 $35.17 June 30, 20X3 $40.58 $37.96 $38.21 Dividend Payouts Dividend History of Nielson Corporation June 30, 20X1 $2.09 June 30, 20X2 $2.19 June 30, 20X3 $2.30 Note: Annual dividends are paid on June 30 each year, growing by an annual fixed integral percentage (rounded).Email from CFO X To: Flora Parkes, Accounting Manager From: Alison Thornton, CFO Date: July 1, 20X3 RE: Stock Valuation Flora, Below is the guidance we use for calculating the value of common stock. 1. Use both the Capital Asset Pricing Model (CAPM) and the dividend growth model to calculate the required rate of return of target companies. 2. Take the lower of the rates of return. 3. Use the average market share price as of the date before the valuation date to calculate the rate of return for a common stock. 4. Use the dividend growth model to calculate the stock value as if the required rate of return is known. 5. Use the low market share price for the date before the valuation date for comparison to the calculated market value. Let me know if you have questions. Regards, Alison Thornton Chief Financial Officerclose all EXHIBITS n exhibits Dividend Payouts Stock Prices Company Valuation Metrics Email from CFO Willis Corporation is planning to invest in Nielson Corporation. Using the information provided in the exhibits, answer the following questions about the valuation of the common stock of Nielson. For each item, enter the appropriate amount in the associated cell, or select a response from the option list provided. Round all amounts to the nearest hundredth. Question Answer 1. What is the required rate of return calculated 123 FORMATTED RESPONSE using CAPM? 2. What is the required rate of return calculated 123 RESET CANCEL ACCEPT using the dividend growth model? 3. What is the required rate of return used to 123 calculate the value of Nielson's common stock? 4. Assuming a dividend growth rate of 4%, what is 123 the calculated value of the common stock of Nielson Corporation? 5. Based only on the comparison of calculated and market value of Nielson's common stock, should Willis invest in Nielson