Calculations should be displayed in an Excel sheet (upload your Excel sheet to Canvas when you are finished with the exam). Short answers or brief explanations should be clearly typed into the Excel sheet. 1. The most recent Income Statement for the Wolfpack Company is shown here: Revenues $ 850,000 Costs ___ ($ 500,000) Taxable Income $ 350,000 Taxes (40%) ($ 140,000) Net Income $ 210,000 Dividends Paid $ 52,500

The dividend for the Vesper Company is currently $8 per share. It is expected to grow at 20% next year and then the growth rate is expected to decline linearly to a perpetual rate of 6% beginning in year 5. If you require a return of 17% on the stock, what is the stock value per share? (Show your calculations in Excel.) (20 points)

3. Mutual fund AAAAX has an expected return of 15% and expected standard deviation of 25%. If the funds returns are normally distributed, what is the chance of losing money in any year on AAAAX? (10 points) (Show calculations in Excel.)

4. The economy is forecasted to boom next year! Given this information, would a tactical investor more likely buy Cyclical Stocks or Defensive Stocks? (Provide 1 sentence on why). (10 points) 5. Briefly explain why investors are more often observed to take risks to avoid losses rather than take risks to make gains. (3 sentences Max). (10 points)

PLEASE SHOW IN EXCEL