Digital Timber International (DTI) is a developer of distributed data storage technologies. The profitability of DTI and its investment policy are summarized in the following table: Expected earnings per share Plow-Back Ratio Book Value per Share b $100 1 $27.9 0.79 0.58 0 2 3 Assume that without new investments, expected earnings of DTI would remain at their time-1 level in perpetuity. All investments are expected to generate a constant level of incremental earnings per year in perpetuity for each $1 of investment. For the time-1 investment, the cash flow is $0.2 per $1 invested, and for the time-2 investment, it is $0.15. For an investment made at time t, incremental cash flows are generated starting in year t + 1. The plow-back ratio will remain equal to 0 after year 3. The appropriate discount rate for all future cash flows of DTI is 11.3%.

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Use the information to solve the current share price. Scheduled dividends: $6.90, $17.90, $22.90, and $4.70. After that, they will pay a constant dividend growth rate of: 6%. The required return on the stock: 10% What is the current price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 12.34.) Share price

Calculate the missing information for the following stock. Show your work. Company Earnings per Share Annual Dividend Current Price per Share Current Yield Price-Earnings Ratio Sampson, Inc. ? $0.39 $26.50 ? 22

The annual dividend yield is compounded by dividing annual dividend by the current stock price.

The Price-Earning ratio (P/E) of stock  A, B, C are 5, 3, 7 respectively. Which one you should buy?

ADC 1) Based on End-of-Chapter Problem 6 in Chapter 5 The stock of Business Adventures sells for $40 a share. Its likely dividend payout and end- of-year price depend on the state of the economy by the end of the year as follows: Stock Price Dividend. $2.00 $50 1.00 43 0.50 34 a. Calculate the expected holding-period return and standard deviation of the holding- period return. All three scenarios are equally likely. Boom Normal economy Recession b. Calculate the expected return and standard deviation of a portfolio invested half in Business Adventures and half in Treasury bills. The return on bills is 4%.

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The sum of the expected dividend and the expected capital gains yield is called a. Required rate of return b. expected total return c. expected rate of return d. value of the stock e. realized rate of return

A stock has had the following year-end prices and dividends: Year Price 1 $65.08 71.95 77.75 64.02 74.61 87.25 23456 Dividend $.75 .80 .86 .95 1.02 What are the arithmetic and geometric returns for the stock? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Arithmetic average return Geometric average return % %