1. If early 2017 you bought a stock that is expected to pay a dividend of $9 by the end of 2017, the dividend is expected to grow at a constant growth rate of 3% hence after. What was the value of this stock in early 2017 according to the dividend discount model if the discount rate was 10%?
2. A firm has an expected free cash flow of $2,007,799 by the end of 2018 that is expected to be constant at this level beyond this year forever. If its cost of capital is 6%, what is the value of this firm by the end of 2018?
3. By the early of 2016, a firm had a book value per share (BPS) of $68, a ROCE of 17% for 2016. If the required return is 9%, what is the Residual earnings for 2016?
4. A project has an initial cost of $1,000,000 and is expected to last for 2 years. In year 1, depreciation charge will be $100,000 and earnings are expected to be $195,700. In year 2, depreciation will be $100,000 and earnings are expected to be $210,934. Assume the required return is 12%. What is the value of this project?
5. A stock trades for $97 has a book value per share of $49, analysts' EPS forecast for year 1 is $16. The required return is 13%. What is the speculative value implied by the observed market price?