1. n PV coupon rate 0.09 coupon 450 1 434.7826087 FV 10000 2 420.0798152 year 10 seminanually n 20 3 405.8742176 rate of return 0.07 semianually 0.035 4 392.1490025 5 378.8879251 6 366.0752899 7 353.6959323 8 341.7352003 9 330.1789375 10 319.0134662 11 308.2255712 12 297.8024842 13 287.7318688 14 278.0018056 15 268.6007784 16 259.5176603 17 250.7417007 18 242.2625128 19 234.0700607 20 226.154648 FV 5025.658844 Value 11421.24033 2. coupon rate 0.09 coupon 450 n PV FV 10000 1 426.5402844 year 10 seminanually n 20 2 404.3035871 rate of return 0.11 semianually 0.055 3 383.2261489 4 363.2475345 5 344.3104592 6 326.3606249 7 309.3465638 8 293.2194918 9 277.9331676 10 263.4437607 11 249.7097258 12 236.6916832 13 224.3523064 14 212.6562146 15 201.5698716 16 191.0614897 17 181.1009381 18 171.659657 19 162.7105753 20 154.2280335 FV 3427.289633 value 8804.961752 3. FV 100 Maximum price 81.81818182 D 9 required rate of return 0.11 if the price is 96 thus required rate of return 0.09375 less than 0.11 it is overvaluated against a purchases at this price 4. E0 per share 10 payout ratio 0.6 thus D1 6.6 D0 per share 6 E1 11 discounted dividend discounted selling price P1 132 5.892857143 117.8571429 required rate of return 0.12 maximum price 123.75 5. E1 11 discounted dividend discounted selling price D1 6.6 6.111111111 101.8518519 P1 110 maximum price 107.962963 required rate of return 0.08 6. D0 6 infinite period DDM g 0.08 Price Vj: 216 required rate of return 0.11 7. payout ratio 0.4 retention ratio 0.6 ROE 0.16 g 0.096 9. required rate of return 0.13 P/E 11.76470588 payout ratio 0.4 g 0.096 10. required rate of return 0.13 g 0.08 payout ratio 0.5 P/E 10 14. b 0.9 thus g 0.27 EPS 5 ROE 0.3 P/E -0.769230769 if required rate of return is less than growth rate g can not be used required rate of return 0.14 "if b = 0,6 and ROE 0,12" b 0.6 thus g 0.114 ROE 0.19 P/E 15.38461538 EPS for next year 5.57 thus Price 85.69230769 15. D0 1.25 g0 0.07 g1 0.08 P3 40 a. n 1 2 3 discounted selling price required rate of return 0.12 DD 1.205357143 1.162308673 1.120797649 28.47120991 thus maximum price 31.95967338 b. g 0.08 indefinitily maximum price 33.75 c. P3 42.51528