Q.1) Mr. Ahmed is trying to determine the value of ABC Company's common

stock. The earning growth rate over his planned 5 year holding period is estimated to be 8%, and the dividend payout ratio is 60%. The ending P/E ratio is expected to be 15 time and current earnings per share are $4. If the required rate of return of this stock is 16%, what should be the price of ABC stock?

q2) Mr. Ahmed would like to have an annuity of Rs.50,000 per year for

20 years when he retires in 25 years right now. If the rate of interest is 12 percent per annum on investment then how much will Mr. Ahmed need to save and invest at end of each year into achieve his objective

q3)An investor wantsto get Rs.1,500,000 after end of 5^th year from now,for purchase of house. The rate of interest is 14% per annum on fixed deposit account. How much amount should he deposit in fixed deposit account eachyear in order to get the total amount Rs.1,500,000 at end of 5^th year.

Required: Compute annual savings to be deposited each year, if the amount is deposited in fixed deposit account at , assume;

a)Beginning of each year.

b)End of each year.