Exercise 1.

A company's share is trading at 65 and dividend paid last year was of 6 per share Assuming that dividend payments are constantly growing at a rate of 4% and that the required rate of the market is of 10%, what would the share price be?

Exercise 2.

A company is looking to acquire additional outlets for increasing storage needs The project's II (initial investment) and future cash flows would look as follows:

Initial investment Cash flow year 1 Cash flow year 2 Cash flow year 3 Cash flow year 4 Cash flow year 5 Considering the discount rate is of 8%, what would the IRR of the project be, and would you advise the company to go ahead with it?

Exercise 3.

A company is looking into investing in renewable energies which would involved the following investment and expected cash flows:

Initial investment Cash flow year 1 Cash flow year 2 Cash flow year 3 From the BCR (benefit cost ratio) or PI (profitability index) point of view, would you recommend this investment and why?