(a) Calculate the value of each share as at 31 December 2012.

(b) Calculate dividend yield as at 31 December 2012.

(c) Calculate the price-to-book ratio as at 31 December 2012.

(d) Explain the four market multiple ratios which were identified in this question and comment on the value of this company.

(e) Critically discuss whether book value is a good estimate of economic value of assets? Briefly outline how we can arrive at economic value by giving two examples of balance sheet items.

Income statement for year ended 31 December 2012 million) Revenue G2000 55,800 Cost of sales 6200 Gross profit 1700 Expenses Operating profit 4,500 Interest cost 520 D3S80 Profit before tax 1,114 Taxation Profit for the year 2,866 Dividends 1,800 Retained earnings 1.066 Balance Sheet extracts at 31 December 2012 (million) 2012 2011 8,700 10,800 Long-term debt Short-term debt 1,400 1,620 Total debt 10,100 12,420 NA Total equity 16,623 Additional Data at 31 December 2012 P/E ratio 14 Price-to-cashflow 751 Corporate tax 28% Number of ordinary shares of 1 (in million) 1400