ANSWERS MUST BE TYPED Show ALL calculations and formulas 1. Best Yet Corp had net income of $2.76/share last year, and it paid $1.21/share in dividends last year. A) What was its Dividend Payout Ratio last year? B) What was its Retention Rate last year? (Your answers should be a % carried to one place.) 2. Best Yet can earn 9.0%/year after tax on new investments. Given your answers to Q #1, how fast would you expect its net income to grow/year? (Your answer should be a % carried to 1 place.) 3. You expect Best Yet to pay a dividend of $1.27/share next year. Given a current stock price of $38.30/share and your answers to Q #2, what is your estimate for Best Yet's Cost of Equity? (Your answer should be a % carried to 1 place.) 4. Ionic Corp's stock is selling for $85/share. You expect dividends to be $1.32/share over the next year (Year 1), $1.42/share in Year 2 and $1.53/share in Year 3, and you anticipate the stock will be trading at $118/share at the end of Year 3. a. Draw a timeline assuming all cash flows occur at the end of each year. b. If you have estimated Ionic Corp's Cost of Equity to be 8.6%, what do you believe the true value of the stock is today? c. Given your answer to 4.b., what would you recommend to your clients? 5. You are an equity analyst considering whether you should recommend Proctor & Gamble (PG) to your clients. You estimate PG's Cost of Equity is 8%, and you believe PG can grow its net income 4.5%/year indefinitely. You expect dividends next year to be $8 billion and share buybacks to be $4.1 billion. Given your analysis and expectations, A) what is your estimate of the true value of PG's market capitalization now? B) Given your answer to A, and PG's 2,411,000,000 shares outstanding, what is your estimate for the true value of PG's stock per share? 11/18/211