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Question 1: GM Corp. reported earnings and paid dividends from 2006 and 2010 as follows: (in dollars) 2006 2007 2008 2009 2010 Basic EPS 1.53

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Question 1: GM Corp. reported earnings and paid dividends from 2006 and 2010 as follows: (in dollars) 2006 2007 2008 2009 2010 Basic EPS 1.53 1.65 1.93 1.96 2.32 DPS 0.67 0.72 0.78 0.86 0.96 EPS = Earnings per share DPS = Dividend per share Assume a required return (cost of equity) per year of 8% for GM Corp. Requirement 1: Calculate cum-dividend earnings per share for GM Corp. for each year, 2007-2010. (12 points) Requirement 2: Calculate abnormal earnings growth (in dollars) for each year, 2007-2010. (13 points)

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