II Stock Valuation A Based on the figures provided, calculate each of the following 1 The new dividend yield if the company increased its dividend per share by 1 75 2 The dividend yield if the firm doubled its outstanding shares 3 The rate of return on equity (i e , the cost of stock) based on the new dividend yield you calculated above B What effect would you expect each of the calculations you performed to have in terms of shareholder value In other words, suppose the companys goal is to maximize shareholder value How will each of the situations support or inhibit that goal Be sure to justify your reasoning C To what extent do you feel the companys dividend policies support or hinder their strategies For example, if the company is attempting to grow, are they retaining and reinvesting their earnings rather than distributing them to investors through dividends Be sure to substantiate your claims Milestone Two Stock Valuation and Bond Issuance (please fill in the shaded YELLOW cells) PART I STOCK VALUATION Dividend from Financial Statements Year Cash Div share ($) Dividend Yield Stockholder's Equity (in millions) Stock Price 2012 1 16 2 30 17,777 50 43478261 2013 1 56 2 20 12,522 70 90909091 2014 1 88 2 30 9,322 81 73913043 1 Stock Valuation The new dividend yield if the company increased its dividend per share by 1 75 Year Cash Div Share ($) 1 75 Dividend Yield Stockholder's Equity (in millions) Stock Price 2012 2 91 5 77 17,777 50 43478261 2013 3 31 4 67 12,522 70 90909091 2014 3 63 4 44 9,322 81 73913043 2 The dividend yield if the firm doubled it's outstanding shares Year Cash Div Share ($) Dividend Yield Stockholder's Equity (in millions) doubled Stock Price 2012 0 58 1 15 35,554 50 43478261 2013 0 78 1 10 25,044 70 90909091 2014 0 94 1 15 18,644 81 73913043 3 The rate of return on equity (i e , the cost of stock) based on the new dividend yield you calculated above Year Cash Div Share ($) 1 75 Stock Price Return on Investment 2012 2 91 50 4347826 2013 3 31 70 9090909 3 72 2014 3 63 81 7391304 3 78

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II. Stock Valuation A. Based on the figures provided, calculate each of the following: 1. The new dividend yield if the company increased its dividend

II. Stock Valuation A. Based on the figures provided, calculate each of the following: 1. The new dividend yield if the company increased its dividend per share by 1.75 2. The dividend yield if the firm doubled its outstanding shares 3. The rate of return on equity (i.e., the cost of stock) based on the new dividend yield you calculated above B. What effect would you expect each of the calculations you performed to have in terms of shareholder value? In other words, suppose the companys goal is to maximize shareholder value. How will each of the situations support or inhibit that goal? Be sure to justify your reasoning. C. To what extent do you feel the companys dividend policies support or hinder their strategies? For example, if the company is attempting to grow, are they retaining and reinvesting their earnings rather than distributing them to investors through dividends? Be sure to substantiate your claims. Milestone Two: Stock Valuation and Bond Issuance (please fill in the shaded YELLOW cells)

PART I: STOCK VALUATION
	Dividend from Financial Statements:

	Year	Cash Div/share ($)	Dividend Yield	Stockholder's Equity (in millions)	Stock Price
	2012	1.16	2.30%	17,777	50.43478261
	2013	1.56	2.20%	12,522	70.90909091
	2014	1.88	2.30%	9,322	81.73913043

1. Stock Valuation - The new dividend yield if the company increased its dividend per share by 1.75

	Year	Cash Div/Share ($) +1.75	Dividend Yield	Stockholder's Equity (in millions)	Stock Price
	2012	2.91	5.77%	17,777	50.43478261
	2013	3.31	4.67%	12,522	70.90909091
	2014	3.63	4.44%	9,322	81.73913043

2. The dividend yield if the firm doubled it's outstanding shares

	Year	Cash Div/Share ($)	Dividend Yield	Stockholder's Equity (in millions) -doubled	Stock Price
	2012	0.58	1.15%	35,554	50.43478261
	2013	0.78	1.10%	25,044	70.90909091
	2014	0.94	1.15%	18,644	81.73913043


3. The rate of return on equity (i.e., the cost of stock) based on the new dividend yield you calculated above

	Year	Cash Div/Share ($) +1.75	Stock Price	Return on Investment
	2012	2.91	50.4347826
	2013	3.31	70.9090909	3.72%
	2014	3.63	81.7391304	3.78%