A. The Purple Companys stock price is $45 per share, it is expected to pay $1.25 in dividend per share with an expected earnings of $4.50 per share. Assume expected values are in the forthcoming year.

Calculate the Payout ratio.

Calculate the PE ratio.

B.The Purple Companys growth in EPS in the coming year is 5%.

Calculate the PEG ratio.

4. The blue company has ROE = 25%; growth in EPS = 4.5%; payout ratio of 35% and investors required return of 12.5%. Calculate the price to book value ratio.

If P/BV = 2.5 you will buy_________ you will sell__________

5.a) If the payout ratio is 35% and net profit margin is 4.5% with a growth rate of 5%, calculate price to sales ratio if you require a 11% return on investment.

b) If sales rise by $1.25 per share, what would be the change in stock price?