Below you will find the information for Pioneer Aviation. Pioneer Aviation has a dividend that will grow at a constant rate indefinitely. Use this to complete the box on the next page. YOU MUST SHOW YOUR WORK TO GET CREDIT FOR THIS QUESTION EVEN IF YOU GET THE ANSWER CORRECT. Once you have completed the box, answer the following questions. a. Complete the box. Each line item is worth 2 points each. (34 points) b. Analyze the information you have. Do you think this company is in a position to meet the parameters illustrated by Warren Buffett to do a repurchase? Defend your answer. (10 points) c. Why does the PE ratio drop from the beginning value after the company does a dividend or a repurchase? (5 points) d. At least in theory, does it matter whether or not a company does a repurchase or a buyback. Defend your answer and think about it from both the investor and company's point of view. (6 points) e. What could this company do if it wanted to raise its growth rate? Identify at least 3 things the company could do and explain how these actions will increase the growth rate. (9 points) Required Return Share Price Dividend Yield Current EPS Current PE 14.00% $8.50 8.78% $1.30 6.51 Sales Cost of Goods Sold Gross Profit Selling & Administrative Depreciation EBIT Interest Expense Taxable income Taxes Net Income Shares Outstanding $1,250,000 $825,000 $425,000 $310,000 $28,000 $87,000 $4,000 $83,000 $17,430 $65,570 50,250 Cash Accounts Receivable $138,000 $24,000 $135,000 $50,000 Inventory $150,000 $185,000 Accounts Payable Notes Payable Current Liabilities Long-Term Debt Total Liabilities Equity Total L/E Current Assets Fixed Assets $312,000 $500,000 $200,000 $385,000 $427,000 S812,000 Total Assets $812.000 Dividend per share Total Dollar Value of Repurchase/Dividend Dividend Payout Retention Ratio ROE Growth rate Intrinsic Value of the Stock Repurchase New Prices New Shares New EPS New PE Investor Value per Share Dividend New Prices New Shares Repurchase New Prices New Shares New EPS New PE Investor Value per Share Dividend New Prices New Shares New EPS New PE Investor Value per Share For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac)