5. LG3, 4 Calculating expected return on investment. An investor is thinking about buying some shares of Data Systems, Inc, at $75 a share. She expects the price of the stock to rise to $115 a share over the next 3 years. During that time, she also expects to recelve annual dividends of $4 per share. Given that the investor's expectations (about the future price of the stock and the dividends it pays) hold up, what rate of return can the investor expect to earn on this investment? (Hint: Use either the approximate yield formula, spreadsheet, or a financial calculator to solve this problem.) 6. LG3, 4 calculating book value. A company has total assets of $2.5 billion, total liabilities of $1.8 billion, and $200 million worth of 8 percent preferred stock outstanding. What is the firm's total book value? What would its book value per share be if the firm had 100 million shares of common stock outstanding? 7. LG3, 4 Calculating key stock performance metrics. The Alliance Company recently reported net profits after taxes of $15.8 million. It has 2.5 million shares of common stock outstanding and pays preferred dividends of $1 million a year. The company's stock currently trades at $60 per share. a. Compute the stock's EPS. b. What is the stock's P/E ratio? c. Determine what the stock's dividend yleld would be if it paid $1.75 per share to common stockholders. 8. LG3, 4 Calculating expected return on a stock. The price of Applied Adhesives, Inc. is now $85. The company pays no dividends. Adam Gardner expects the price 4 years from now to be $125 per share. Should Adam buy Applied Adhesives if he wants a 15 percent rate of return? Explain