Case 15 - Pacific Healthcare Equity Financing:

Attached is a PDF of the questions, and an excel document with the given information from the case. I need help completing all questions in excel with formulas.

Pacific Healthcare: Historical and Forecast Dividend's per Share Historical Forecast Year Dividend's per Share 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 $0.215 $0.324 $0.353 $0.362 $0.391 $0.480 $0.528 $0.581 $0.639 $0.703 $0.773 $0.804 $0.836 Pacific Healthcare Dec. 31, 2013 Selling Price Per Share Dividend Per Share Beta Yield on Long-Term Treasury Bond: Expected Market Return Forecasted Growth 2014-2018 (5yrs) Forecasted Growth per year 2019 and after Capital Gains Yield = Capital Gain / Beginning Price Dividends Yield= Earnings (D2) / Earnings (P1) $8.00 $0.48 1.2 5% 11% 10% 4% Cases in Healthcare Finance, 5th Edition Copyright 2014 by FACHE CASE 15 QUESTIONS PACIFIC HEALTHCARE (A) Stock Valuation 1. a. What is the estimated value of Pacific Healthcare stock on December 31, 2013? b. Is the stock under- or over-priced? c. If investors estimate that Pacific Healthcare will grow about 10 percent per year for the next five years (2014-18), what constant growth rate (2019+) are they using to actually price the stock? (Hint: what constant growth rate (2019+) produces an actual December 31, 2013 stock price of $8?) 2. What is the estimated stock value on December 31 2014, 2015, 2016, 2017, and 2018, assuming that the stock is in equilibrium? 3. a. What are the estimated dividend yield, capital gains yield, and total return for 2014, 2015, 2016, 2017, and 2018? b. Why do the dividend yield and capital gains yield change every year? c. What do you notice about the total return? d. What is the estimated dividend yield and capital gains yield after 2018? No additional calculations are required. 4. In your opinion, what are three key learning points from this case? 11/18/2013