All financial statement numbers are in millions of dollars unless otherwise indicated.

Assume today is 30th June 2017 and you have just been paid a dividend and that the next dividend will be received in exactly one year (assume dividend is paid annually).

The stock price as at 30th June 2017 was $38.30.

Using this spreadsheet:

a) Calculate the following ratios for financial year ending at 30th June 2017

- Forward Price-Earnings Ratio and Trailing Price-Earnings Ratio. Briefly discuss the difference between these two ratios.

- If the stock was fairly priced according to the dividend discount model, what would be its Price- Earnings ratio (both Forward and Trailing)?

- The P/E ratio of the S&P/ASX 200 Consumer Discretionary Sector GICS Level 1 Index is 25.07 as at the end of financial year of 2017, use this number as the average industry P/E ratio for Flight Centre. Comparing your estimate of P/E ratio for Flight Centre with the industry average P/E ratio, what conclusion could you make?

Now assume you bought this share two years ago:

b) If you bought share in the company on the 1st July 2015 at $34 and the share price exactly one year ago was $31, what is your capital gain per share today?

c) Use the information in part (b), if you reinvested the dividends you received in more FLT shares, what is your wealth on 30th June 2017 on a per share basis? Assume that you have bought 1000 shares.

F G FY 2013 06/30/2013 1.37 A C D E 1 2 Flight Centre Travel Group Ltd (FLT AU) - Dividend Summary 3 4 In Millions of AUD except Per Share FY 2010 FY 2011 FY 2012 5 12 Months Ending 06/30/2010 06/30/2011 06/30/2012 6 Dividends per Share 0.7 0.84 1.12 7 Dividends per Share - 5 Yr Geo Growth 8 Dividend Yield 1.5634 3.7003 4.7015 9 Dividend Payout Ratio 49.9374 60.0536 56.008 10 Cash Dividend Coverage 2.0025 1.6652 1.7855 11 Dividends Paid -25.9 -79.9 -89.0 12 Total Cash Preferred Dividends 0.0 0.0 0.0 13 Total Cash Common Dividends 69.8 84.0 112.1 14 Trailing 12M Preferred Dividends 0.0 0.0 0.0 15 Trailing 12M Common Dividends 69.8 84.0 112.1 16 Trailing 12M Dividends Per Share 0.7 0.84 1.12 2.9748 55.9101 1.7886 -117.3 0.0 137.6 0.0 137.6 1.37 FY 2014 06/30/2014 1.52 76.0031 3.2846 73.879 1.3536 -146.8 0.0 152.9 0.0 152.9 1.52 FY 2015 06/30/2015 1.52 16.7748 4.4562 59.7343 1.6741 -153.1 0.0 153.3 0.0 153.3 1.52 FY 2016 06/30/2016 1.52 12.5934 4.9715 62.7218 1.5943 -158.4 0.01 153.4 0.0 153.4 1.52 FY 2017 06/30/2017 1.39 4.4141 3.577 60.8399 1.6437 -138.3 0.0 140.4 0.0 140.4 1.39 F G FY 2013 06/30/2013 1.37 A C D E 1 2 Flight Centre Travel Group Ltd (FLT AU) - Dividend Summary 3 4 In Millions of AUD except Per Share FY 2010 FY 2011 FY 2012 5 12 Months Ending 06/30/2010 06/30/2011 06/30/2012 6 Dividends per Share 0.7 0.84 1.12 7 Dividends per Share - 5 Yr Geo Growth 8 Dividend Yield 1.5634 3.7003 4.7015 9 Dividend Payout Ratio 49.9374 60.0536 56.008 10 Cash Dividend Coverage 2.0025 1.6652 1.7855 11 Dividends Paid -25.9 -79.9 -89.0 12 Total Cash Preferred Dividends 0.0 0.0 0.0 13 Total Cash Common Dividends 69.8 84.0 112.1 14 Trailing 12M Preferred Dividends 0.0 0.0 0.0 15 Trailing 12M Common Dividends 69.8 84.0 112.1 16 Trailing 12M Dividends Per Share 0.7 0.84 1.12 2.9748 55.9101 1.7886 -117.3 0.0 137.6 0.0 137.6 1.37 FY 2014 06/30/2014 1.52 76.0031 3.2846 73.879 1.3536 -146.8 0.0 152.9 0.0 152.9 1.52 FY 2015 06/30/2015 1.52 16.7748 4.4562 59.7343 1.6741 -153.1 0.0 153.3 0.0 153.3 1.52 FY 2016 06/30/2016 1.52 12.5934 4.9715 62.7218 1.5943 -158.4 0.01 153.4 0.0 153.4 1.52 FY 2017 06/30/2017 1.39 4.4141 3.577 60.8399 1.6437 -138.3 0.0 140.4 0.0 140.4 1.39