REQUIREMENTS (Do them in given order) 1. Utilize excel to calculate the following for each firm: a. Permanent Earnings ratio (Perm EPS / Total EPS) 2. Find the relationship between the various variables and stock price by plotting stock price against these variables in excel and using a straight line fit. Enable excel to display the equation of the best-fit line. a. Stock price (Y axis) vs Earnings per share (EPS) (X axis) 3. Comment on the relationships above a. Is it a positive or negative relationship, or no relationship? b. How does stock price change for a unit change in EPS? c. What does your findings tell you about how the importance of earnings to equity market participants?

Definitions: 1. Total EPS = Permanent EPS + transitory EPS 2. Price-to-earnings ratio = Stock price / EPS 3. Permanent earnings ratio = Permanent EPS / total EPS 4. Projected Returns = Projected Stock Price Stock Price 5. Projected ROI = Projected Returns / Stock Price

Please calculate EPS

Firm ID nur Stock price this year Permanent Earnings per share this year Transitory Earnings per share Total Earnings per share this year 1 32.04286698 3.196531792 0.901537047 2 19.99293666 1.858203694 0.461789726 3 18.9307161 1.479520196 0.324834428 16.99249236 1.401072386 0.363023304 5 23.30015217 2.058145612 0.607008279 6 20.10455204 1.790338164 0.778743961 7 15.76563778 1.218859456 0.483420374 8 35.73701046 3.550036753 0.633571354 9 16.22481988 1.396175227 0.543075245 10 18.29518047 1.690487885 0.742018664 11 15.94449982 1.311074053 0.190859435 12 21.51803435 1.903441575 0.443182243 13 17.18217284 1.477579569 0.269126498 14 19.47583038 1.75395799 0.354390581 15 38.30865996 3.631041131 0.486246787 16 45.18783175 4.113573701 0.298462354 17 18.97330468 1.694845223 0.338522357 18 22.45552618 1.974841609 0.617504052 19 32.88389793 3.313537549 1.222579051 20 32.13274782 3.24790425 0.767650337 21 28.59575504 2.466462161 0.335789507 22 25.49239334 2.564011226 0.770617444 14.42813907 1.056274911 0.191468275 24 26.48141625 2.591121286 0.837328305 27.81526917 2.364398945 0.293696717 26 21.31214098 1.808340354 0.506860031 27 16.90312054 1.198007148 0.176519008 28 15.24685873 1.281706756 0.514587409 23.84335259 2.011829674 0.200265288 30 27.34261463 2.472525694 0.394715546 31 38.00232827 3.876876877 1.046046046 32 24.34952211 2.315073154 0.483800234 33 19.04086768 1.484584694 0.312054165 34 38.13800852 4.098213319 1.284082296 35 16.78565039 1.445611573 0.285820418 36 39.51864076 4.104760716 1.20696325 uuuuunm%% Projected Total Earnings per share next year Projected Stock Price next year 4.257895428 2.50581379 1.952306643 1.904202928 2.541665154 2.497468599 1.690091235 4.538611782 1.799632949 2.314172397 1.633040893 2.536967976 1.894464024 2.28374437 4.480392031 4.823393425 2.202852102 2.572597245 4.204762846 4.340345011 3.048897884 3.462829231 1.353370678 3.428449592 2.894535557 2.206699964 1.494326871 1.8219283 2.41327793 3.114493809 4.961691692 3.030380704 1.945097328 5.218367082 1.875993149 5.024390716 Firm ID nur Stock price this year Permanent Earnings per share this year Transitory Earnings per share Total Earnings per share this year 1 32.04286698 3.196531792 0.901537047 2 19.99293666 1.858203694 0.461789726 3 18.9307161 1.479520196 0.324834428 16.99249236 1.401072386 0.363023304 5 23.30015217 2.058145612 0.607008279 6 20.10455204 1.790338164 0.778743961 7 15.76563778 1.218859456 0.483420374 8 35.73701046 3.550036753 0.633571354 9 16.22481988 1.396175227 0.543075245 10 18.29518047 1.690487885 0.742018664 11 15.94449982 1.311074053 0.190859435 12 21.51803435 1.903441575 0.443182243 13 17.18217284 1.477579569 0.269126498 14 19.47583038 1.75395799 0.354390581 15 38.30865996 3.631041131 0.486246787 16 45.18783175 4.113573701 0.298462354 17 18.97330468 1.694845223 0.338522357 18 22.45552618 1.974841609 0.617504052 19 32.88389793 3.313537549 1.222579051 20 32.13274782 3.24790425 0.767650337 21 28.59575504 2.466462161 0.335789507 22 25.49239334 2.564011226 0.770617444 14.42813907 1.056274911 0.191468275 24 26.48141625 2.591121286 0.837328305 27.81526917 2.364398945 0.293696717 26 21.31214098 1.808340354 0.506860031 27 16.90312054 1.198007148 0.176519008 28 15.24685873 1.281706756 0.514587409 23.84335259 2.011829674 0.200265288 30 27.34261463 2.472525694 0.394715546 31 38.00232827 3.876876877 1.046046046 32 24.34952211 2.315073154 0.483800234 33 19.04086768 1.484584694 0.312054165 34 38.13800852 4.098213319 1.284082296 35 16.78565039 1.445611573 0.285820418 36 39.51864076 4.104760716 1.20696325 uuuuunm%% Projected Total Earnings per share next year Projected Stock Price next year 4.257895428 2.50581379 1.952306643 1.904202928 2.541665154 2.497468599 1.690091235 4.538611782 1.799632949 2.314172397 1.633040893 2.536967976 1.894464024 2.28374437 4.480392031 4.823393425 2.202852102 2.572597245 4.204762846 4.340345011 3.048897884 3.462829231 1.353370678 3.428449592 2.894535557 2.206699964 1.494326871 1.8219283 2.41327793 3.114493809 4.961691692 3.030380704 1.945097328 5.218367082 1.875993149 5.024390716