3ar4et ri$e< not t'e ar value

_..

_An&_{An&er /C0 i $}_{er /C0 i $orre$}_{orre$t. T'e r}_{t. T'e releva}_{elevant $al$}_{nt $al$ulati}_{ulation i to i}_{on i to ivie t}_{vie t'e annua}_{'e annual ivi}_{l ivien* (% t'}_{en* (% t'e ;uant}_{e ;uantit% of f}_{it% of fun re}_{un re$eiv}_{$eive* at}_{e* at}

t'e ti3e t'e to$4 i iue. T'e fun re$eive* fro3 uner&riter  e;ual !:+ /!:? ellin- ri$e , ! uner&ritin- fee0.

T'u< t'e $ot of fun* i ?.+6 /!? \ !:+0.

An&er /A0 i in$orre$t (e$aue uner&riter 1 rou$e a $ot of fun* of 1#.+6. An&er /B0 i in$orre$t (e$aue

of 2.+6.

_..

_An&_{An&er /D0 i}_{er /D0 i $o}_{ $orre$t}_{rre$t. T'e}_{. T'e $o3}_{$o3an% &i}_{an% &ill re$}_{ll re$eive t}_{eive t'e ue}_{'e ue of onl}_{of onl% !"+}_{% !"+ er '}_{er 'are.}_{are. T'e an}_{T'e annual }_{nual ivie}_ivien_n

An&er /A0 i in$orre$t (e$aue =.+)6 i $al$ulate* (% iviin- t'e annual ivien* of !.:# /"6 @ !"=0 (% !?) /!"2

iue ri$e L !+ iuan$e $ot0.

iue ri$e L !+ iuan$e $ot0. An&er /B0 i in$orre$t (e$aue =.?+6 i $al$ulate* (% iviin- t'e annual ivien* ofAn&er /B0 i in$orre$t (e$aue =.?+6 i $al$ulate* (% iviin- t'e annual ivien* of

!.:# /"6 @ !"=0 (% t'e !"2 iue ri$e.

!.:# /"6 @ !"=0 (% t'e !"2 iue ri$e. An&er /C0 i in$orre$t (e$aue ".#An&er /C0 i in$orre$t (e$aue ".##6 i $al$ulate* (% ivi#6 i $al$ulate* (% iviin- t'e annualin- t'e annual

ivien* of !.:# /"6 @ !"

ivien* of !.:# /"6 @ !"=0 (% t'e !"= ar value. =0 (% t'e !"= ar value. re;uire3ent i "6 of !"=< or !re;uire3ent i "6 of !"=< or !.:# er 'are. Diviin- t'e !.:# (%.:# er 'are. Diviin- t'e !.:# (%

t'e !"+ re$eive* reult in a finan$in- $ot of ".#:6.

2

_..

_An&_{An&er /D0 i $}_{er /D0 i $orre$}_{orre$t. T'e }_{t. T'e roort}_{roortion of e;u}_{ion of e;uit% in t}_{it% in t'e fin}_{'e finan$ia}_{an$ial tru$}_{l tru$ture of}_{ture of t'e fir}_{t'e fir3 i t'}_{3 i t'e value o}_{e value of out}_{f outtani}_{tanin- e;uit}_{n- e;uit%%}

ivie* (% t'e total value of all finan$in- our$e5

e"it6

o!

va"e

det

o!

va"e

e"it6

o!

va"e

+ +

FF

$1<000<000$1<000<000

1<500<0001<500<000

000 <<

1 $

+ +

F .+#F .+#

Given t'at t'e fir3 &ill 3aintain t'e a3e &ei-'t for ea$' finan$in- our$e< ea$' ollar invete 'oul* (e +#6 e;uit%

an* "#6 e(t. T'e firt !"#<### of e;uit% ue in finan$in- ne&

an* "#6 e(t. T'e firt !"#<### of e;uit% ue in finan$in- ne& roe$t i rovie (% retaine* earnin-. T'i our$e ofroe$t i rovie (% retaine* earnin-. T'i our$e of

e;uit% i e@'aute* &'en t'e fir3 rea$'e an invet3ent level of !1=#<### /!"#<### \ .+0.

An&er /A0 i in$orre$t (e$aue t'e $o3an% 'a !"#<### retaine* earnin- to ue a one our$e of roe$t finan$in-.

An&er /B0 i in$orre$t (e$aue !)+<### i +#6 of retaine* earnin-. An&er /C0 i in$orre$t (e$aue !:#<### i t'e

a3ount of a**itional e(t in$urre if no ne&

a3ount of a**itional e(t in$urre if no ne& e;uit% i iue.e;uit% i iue.

27 ..

_{A**ition to retaine* earnin- &ill (e5 !.# 3illion}_{A**ition to retaine* earnin- &ill (e5 !.# 3illion}

#.+ F !1.) 3illion. T'e retaine* earnin- (rea4oint i !1.) #.+ F !1.) 3illion. T'e retaine* earnin- (rea4oint i !1.)

3illion#.) F !" 3illion.

_..

_An&_{An&er /B0 i $}_{er /B0 i $orre$}_{orre$t. T'e $}_{t. T'e $urrent }_{urrent to$4 }_{to$4 ri$e i}_{ri$e i e;ual to t}_{e;ual to t'e u3 of a}_{'e u3 of all fut}_{ll future ivi}_{ure ivien t}_{en t'at 'av}_{'at 'ave (een i}_{e (een i$oun}_$ounte_te

(% t'e re;uire* rate of return. T'u< t'e i$ountin- of t'e firt ivien a%out i 1 L t'e re;uire* rate of return< !) \

1.1". T'e i$ountin- of t'e e$on ivien a%out i 1 L t'e re;uire rate of return ;uare*< ! \ 1.+=". T'e

i$ountin- of t'e t'ir ivien a%out i e;ual to 1 L t'e re;uire rate of return $u(e< != \ 1.="#:. T'e i$ountin-

for t'e future ivien t'at in$reae (% 26 i != ti3e 1 L t'e in$reae in ivien< /!= @ 1.#20< ivie* (% t'e

ifferen$e (et&een t'e re;uire rate of return an* t'e in$reae in ivien*< /.1" , .#20. T'i a3ount< !"?.= /=.+ \ .#20<

i t'en ivie* (% 1 L t'e re;uire* rate of interet $u(e< !"?.= \ 1.="#:. T'erefore< t'e u3 of t'ee nu3(er an t'e

$urrent to$4 ri$e i e;ual to !=#.+# /!1.?) L !).)

$urrent to$4 ri$e i e;ual to !=#.+# /!1.?) L !).) L !.)# L !+.)=0.L !.)# L !+.)=0.

An&er /A0 i in$orre$t (e$aue !++.++ reult fro3 i$ountin- t'e future ivien t'at in$reae (% 26 (% 1 L t'e

re;uire* rate of return to t'e fourt' o&er< 1.21. An&er /C0 i in$orre$t (e$aue !"".21 reult fro3 *i$ountin-

ivien (% 1 L t'e re;uire rate of return< 1.1". An&er /D0 i in$orre$t (e$aue !??.=# reult fro3 a failure to

i$ount t'e ivien at all.

_..

_An&_{An&er /D0 i $}_{er /D0 i $orre$}_{orre$t. T'i}_{t. T'i i a t}_{ i a t&o,t}_{&o,te ro(l}_{e ro(le3. T}_{e3. T'e re}_{'e reent val}_{ent value of a e}_{ue of a eretu}_{retual annui}_{al annuit% of !}_{t% of !1) er %e}_{1) er %ear e;ua}_{ar e;ual}_l

t'e a%3ent ivie* (% t'e interet rate< or !2# /!1) \ .1=0. T'i a3ount i t'e reent value at a *ate # %ear in t'e

future of t'e annuit% to (e ai* in eretuit% (e-innin- in %ear 1. T'e reent value of !2# i$ounte at 1=6 for #

%ear i t'e reultin- ri$e of t'e to$4< or aro@i3atel% !1.)1 /!2# @ .#1=1 reent value of

%ear i t'e reultin- ri$e of t'e to$4< or aro@i3atel% !1.)1 /!2# @ .#1=1 reent value of !1 fa$tor0.!1 fa$tor0.

An&er /A0 i in$orre$t (e$aue t'e future value of t'e annuit% 3ut (e i$ounte until t'e firt a%3ent /i.e.< for 1

%ear0. An&er /B0 i in$orre$t (e$aue t'e future value

%ear0. An&er /B0 i in$orre$t (e$aue t'e future value of t'e annuit% 3ut (e of t'e annuit% 3ut (e i$ounte until t'e firt a%3ent /i.e.< fori$ounte until t'e firt a%3ent /i.e.< for

1 %ear0. An&er /C0 i in$orre$t (e$aue t'e

1 %ear0. An&er /C0 i in$orre$t (e$aue t'e i$ountin- i for 1 i$ountin- i for 1 %ear.%ear.

_..

_An&_{An&er /B0 i $}_{er /B0 i $orre$}_{orre$t. T'e t}_{t. T'e total ro}_{otal ro$ee}_{$ee at t'e en}_{at t'e en* of t'e %e}_{* of t'e %ear &ill (}_{ar &ill (e !1}_{e !11) /!1}_{1) /!11# L !)0. Di}_{1# L !)0. Diviin}_{viin- t'e !1}_{- t'e !11) (% 1}_{1) (% 11)6}₁₎₆

/ori-inal invet3ent lu 1)6 return0 reult in !1## a t'e eire to$4 ri$e.

An&er /A0 i in$orre$t (e$aue !:2.)1 i-nore t'e !) ivien. An&er /C0 i in$orre$t (e$aue !11# oe not

$onier t'e eire for a 1)6 return. An&er /D0 i in$orre$t (e$aue !11) &oul* reult in a ero return.

_..

_D_Daatta_{a --iivveenn5}_{5 E}_EP_PS_{S F}_{F !!))..####H}_{H P}_PE_{E F}_{F ++##]]H}_{H P}_P

F !2#H D F !2#H D

F !1.##H 4 F !1.##H 4



F 1#6H EPS F 1#6H EPS

F !).+#. F !).+#.

St

Ste 1e 155

CaCal$l$ululatate te t'e 'e riri$e $e of tof t'e 'e tto$o$4 o4 one ne %e%ear far froro3 t3 tooa%a%55

44F DF D

PP L /P L /P , P , P

0P0P

#.1#F !1!2# L /P

, !2#0!2# , !2#0!2#

2F !1 L P

, !2# , !2#

!2?F P

..

St

Ste e )5)5

CaCal$l$ululatate te t'e 'e PPE E raratitio oo one ne %e%ear ar frfro3 o3 totoaa%5%5

PE F !2?!).+# F ".)=].

_..

_{Use the dividend growth model to calculate k}_{Use the dividend growth model to calculate k}

::

44



FF

0 0 0 0

P

g)

(1

D

L - F

$28

)

$2.20(1.06

L #.#"

F #.#2 L #.#" F

F #.#2 L #.#" F #.1+ F 1+.6.#.1+ F 1+.6.

_..

_An&_{An&er /B0 i}_{er /B0 i $orre}_{$orre$t. 7}_{$t. 7it'ou}_{it'out an% i}_{t an% ivien}_{vien* -ro&t}_{* -ro&t'< t'e r}_{'< t'e re;uir}_{e;uire* rate o}_{e* rate of retur}_{f return i e;u}_{n i e;ual to t'}_{al to t'e ivi}_{e ivien %}_{en %iel. D}_{iel. Divi}_iviin-_in-

!).=# (% !)# reult in a 1).=6 %iel*.

An&er /A0 i in$orre$t (e$aue t'e ivien* %iel* i 1).=6. An&er /C0 i in$orre$t (e$aue t'e ivien* %iel* i

1).=6. An&er /D0 i in$orre$t (e$aue t'e ivien*

1).=6. An&er /D0 i in$orre$t (e$aue t'e ivien* %iel* i 1).=6.%iel* i 1).=6.

_..

_An&_{An&er /C0 i $or}_{er /C0 i $orre$t}_{re$t. T'i ;u}_{. T'i ;uetio}_{etion invol}_{n involve e}_{ve eti3at}_{ti3atin- t'e $u}_{in- t'e $urrent r}_{rrent ri$e of a $o}_{i$e of a $o3an%}_{3an% to$}_{ to$4 uin- t}_{4 uin- t'e ivi}_{'e ivien}_en

-ro&t' 3oel. T'e ivien -ro&t' 3oel tate t'at t'e ivien %iel* lu t'e -ro&t' rate /=60 e;ual t'e re;uire*

rate of return /1)60. T'u< t'e ivien* %iel* 3ut (e ?6 /1)6 ,

rate of return /1)60. T'u< t'e ivien* %iel* 3ut (e ?6 /1)6 , =60. T'erefore< iviin- t'e !.): ivien* (% t'e ri$e=60. T'erefore< iviin- t'e !.): ivien* (% t'e ri$e

e;ual .#?. Solvin- t'e e;uation reult in a ri$e of !+?.

An&er /A0 i in$orre$t (e$aue !"=.2# au3e a =6 ivien* %iel* intea* of ?6. An&er /B0 i in$orre$t (e$aue

!").=1 reult fro3 u(tra$tin- t'e ivien* fro3 &'at t'e ri$e &oul*

!").=1 reult fro3 u(tra$tin- t'e ivien* fro3 &'at t'e ri$e &oul* (e at a =6 (e at a =6 %iel. An%iel. An&er /D0 i in$orre$t (e$aue&er /D0 i in$orre$t (e$aue

!)?.+1 ue a 1)6 %iel*.

_..

_An&_{An&er /B0 i $}_{er /B0 i $orre$}_{orre$t. T'e i}_{t. T'e ivien}_{vien* -ro&t' 3}_{* -ro&t' 3oel e}_{oel eti3a}_{ti3ate t'e $}_{te t'e $ot of re}_{ot of retaine}_{taine* earnin}_{* earnin- uin}_{- uin- t'e iv}_{- t'e ivien< }_{ien< to$4}_to$4

ri$e< an* -ro&t' rate. T'e $al$ulation involve a**in- t'e =6 -ro&t' rate to t'e ivien* %iel* (ae* on t'e ne@t

e@e$te* ivien. If t'e $urrent ivien i !< t'en t'e =6 -ro&t' rate 3ean t'e ne@t ivien* &ill (e !.1=. T'u<

t'e ivien* %iel* (ae* on a !.1= ivien* i ?6 /!.1= \ !+=0. A**in- ne@t %ear ?6 %iel* to t'e =6 -ro&t' fa$tor

In document P04 - Risks (Sol) (Page 45-47)

..

An&An&er /C0 i $er /C0 i $orre$orre$t. T'e rt. T'e relevaelevant $al$nt $al$ulatiulation i to *ion i to *ivi*e tvi*e t'e annua'e annual *ivi*l *ivi*en* (% t'en* (% t'e ;uante ;uantit% of fit% of fun* reun* re$eiv$eive* ate* at

t'e ti3e t'e to$4 i iue*. T'e fun* re$eive* fro3 un*er&riter  e;ual !:+ /!:? ellin- ri$e , ! un*er&ritin- fee0.

t'e ti3e t'e to$4 i iue*. T'e fun* re$eive* fro3 un*er&riter  e;ual !:+ /!:? ellin- ri$e , ! un*er&ritin- fee0.

T'u< t'e $ot of fun* i ?.+6 /!? \ !:+0.

T'u< t'e $ot of fun* i ?.+6 /!? \ !:+0.

An&er /A0 i in$orre$t (e$aue un*er&riter 1 ro*u$e a $ot of fun* of 1#.+6. An&er /B0 i in$orre$t (e$aue

An&er /A0 i in$orre$t (e$aue un*er&riter 1 ro*u$e a $ot of fun* of 1#.+6. An&er /B0 i in$orre$t (e$aue

of 2.+6.

of 2.+6.

..

An&An&er /D0 ier /D0 i $o $orre$trre$t. T'e . T'e $o3$o3an% &ian% &ill re$ll re$eive teive t'e ue 'e ue of onlof onl% !"+ % !"+ er 'er 'are. are. T'e anT'e annual *nual *ivi*eivi*en*n*

An&er /A0 i in$orre$t (e$aue =.+)6 i $al$ulate* (% *ivi*in- t'e annual *ivi*en* of !.:# /"6 @ !"=0 (% !?) /!"2

An&er /A0 i in$orre$t (e$aue =.+)6 i $al$ulate* (% *ivi*in- t'e annual *ivi*en* of !.:# /"6 @ !"=0 (% !?) /!"2

iue ri$e L !+ iuan$e $ot0.

iue ri$e L !+ iuan$e $ot0. An&er /B0 i in$orre$t (e$aue =.?+6 i $al$ulate* (% *ivi*in- t'e annual *ivi*en* ofAn&er /B0 i in$orre$t (e$aue =.?+6 i $al$ulate* (% *ivi*in- t'e annual *ivi*en* of

!.:# /"6 @ !"=0 (% t'e !"2 iue ri$e.

!.:# /"6 @ !"=0 (% t'e !"2 iue ri$e. An&er /C0 i in$orre$t (e$aue ".#An&er /C0 i in$orre$t (e$aue ".##6 i $al$ulate* (% *ivi*#6 i $al$ulate* (% *ivi*in- t'e annualin- t'e annual

*ivi*en* of !.:# /"6 @ !"

*ivi*en* of !.:# /"6 @ !"=0 (% t'e !"= ar value. =0 (% t'e !"= ar value. re;uire3ent i "6 of !"=< or !re;uire3ent i "6 of !"=< or !.:# er 'are. Divi*in- t'e !.:# (%.:# er 'are. Divi*in- t'e !.:# (%

t'e !"+ re$eive* reult in a finan$in- $ot of ".#:6.

t'e !"+ re$eive* reult in a finan$in- $ot of ".#:6.

..

An&An&er /D0 i $er /D0 i $orre$orre$t. T'e t. T'e roortroortion of e;uion of e;uit% in tit% in t'e fin'e finan$iaan$ial tru$l tru$ture of ture of t'e firt'e fir3 i t'3 i t'e value oe value of outf outtan*itan*in- e;uitn- e;uit%%

*ivi*e* (% t'e total value of all finan$in- our$e5

*ivi*e* (% t'e total value of all finan$in- our$e5

e"it6

e"it6

o!

o!

va"e

va"e

det

det

o!

o!

va"e

va"e

e"it6

e"it6

o!

o!

va"e

va"e

FF

$1<000<000$1<000<000

1<500<0001<500<000

000

000

<<

000

000

<<

1

1

$

$

F .+#F .+#

Given t'at t'e fir3 &ill 3aintain t'e a3e &ei-'t for ea$' finan$in- our$e< ea$' *ollar invete* 'oul* (e +#6 e;uit%

Given t'at t'e fir3 &ill 3aintain t'e a3e &ei-'t for ea$' finan$in- our$e< ea$' *ollar invete* 'oul* (e +#6 e;uit%

an* "#6 *e(t. T'e firt !"#<### of e;uit% ue* in finan$in- ne&

an* "#6 *e(t. T'e firt !"#<### of e;uit% ue* in finan$in- ne& roe$t i rovi*e* (% retaine* earnin-. T'i our$e ofroe$t i rovi*e* (% retaine* earnin-. T'i our$e of

e;uit% i e@'aute* &'en t'e fir3 rea$'e an invet3ent level of !1=#<### /!"#<### \ .+0.

e;uit% i e@'aute* &'en t'e fir3 rea$'e an invet3ent level of !1=#<### /!"#<### \ .+0.

An&er /A0 i in$orre$t (e$aue t'e $o3an% 'a !"#<### retaine* earnin- to ue a one our$e of roe$t finan$in-.

An&er /A0 i in$orre$t (e$aue t'e $o3an% 'a !"#<### retaine* earnin- to ue a one our$e of roe$t finan$in-.

An&er /B0 i in$orre$t (e$aue !)+<### i +#6 of retaine* earnin-. An&er /C0 i in$orre$t (e$aue !:#<### i t'e

An&er /B0 i in$orre$t (e$aue !)+<### i +#6 of retaine* earnin-. An&er /C0 i in$orre$t (e$aue !:#<### i t'e

a3ount of a**itional *e(t in$urre* if no ne&

a3ount of a**itional *e(t in$urre* if no ne& e;uit% i iue*.e;uit% i iue*.

A**ition to retaine* earnin- &ill (e5 !.# 3illionA**ition to retaine* earnin- &ill (e5 !.# 3illion

#.+ F !1.) 3illion. T'e retaine* earnin- (rea4oint i !1.) #.+ F !1.) 3illion. T'e retaine* earnin- (rea4oint i !1.)

3illion#.) F !" 3illion.

3illion#.) F !" 3illion.

..

An&An&er /B0 i $er /B0 i $orre$orre$t. T'e $t. T'e $urrent urrent to$4 to$4 ri$e i ri$e i e;ual to te;ual to t'e u3 of a'e u3 of all futll future *iviure *ivi*en* t*en* t'at 'av'at 'ave (een *ie (een *i$oun$ounte*te*

(% t'e re;uire* rate of return. T'u< t'e *i$ountin- of t'e firt *ivi*en* a%out i 1 L t'e re;uire* rate of return< !) \

(% t'e re;uire* rate of return. T'u< t'e *i$ountin- of t'e firt *ivi*en* a%out i 1 L t'e re;uire* rate of return< !) \

1.1". T'e *i$ountin- of t'e e$on* *ivi*en* a%out i 1 L t'e re;uire* rate of return ;uare*< ! \ 1.+=". T'e

_..

_An&_{An&er /C0 i $}_{er /C0 i $orre$}_{orre$t. T'e r}_{t. T'e releva}_{elevant $al$}_{nt $al$ulati}_{ulation i to i}_{on i to ivie t}_{vie t'e annua}_{'e annual ivi}_{l ivien* (% t'}_{en* (% t'e ;uant}_{e ;uantit% of f}_{it% of fun re}_{un re$eiv}_{$eive* at}_{e* at}

t'e ti3e t'e to$4 i iue. T'e fun re$eive* fro3 uner&riter  e;ual !:+ /!:? ellin- ri$e , ! uner&ritin- fee0.

t'e ti3e t'e to$4 i iue. T'e fun re$eive* fro3 uner&riter  e;ual !:+ /!:? ellin- ri$e , ! uner&ritin- fee0.

An&er /A0 i in$orre$t (e$aue uner&riter 1 rou$e a $ot of fun* of 1#.+6. An&er /B0 i in$orre$t (e$aue

An&er /A0 i in$orre$t (e$aue uner&riter 1 rou$e a $ot of fun* of 1#.+6. An&er /B0 i in$orre$t (e$aue

_..

_An&_{An&er /D0 i}_{er /D0 i $o}_{ $orre$t}_{rre$t. T'e}_{. T'e $o3}_{$o3an% &i}_{an% &ill re$}_{ll re$eive t}_{eive t'e ue}_{'e ue of onl}_{of onl% !"+}_{% !"+ er '}_{er 'are.}_{are. T'e an}_{T'e annual }_{nual ivie}_ivien_n

An&er /A0 i in$orre$t (e$aue =.+)6 i $al$ulate* (% iviin- t'e annual ivien* of !.:# /"6 @ !"=0 (% !?) /!"2

An&er /A0 i in$orre$t (e$aue =.+)6 i $al$ulate* (% iviin- t'e annual ivien* of !.:# /"6 @ !"=0 (% !?) /!"2

iue ri$e L !+ iuan$e $ot0. An&er /B0 i in$orre$t (e$aue =.?+6 i $al$ulate* (% iviin- t'e annual ivien* ofAn&er /B0 i in$orre$t (e$aue =.?+6 i $al$ulate* (% iviin- t'e annual ivien* of

!.:# /"6 @ !"=0 (% t'e !"2 iue ri$e. An&er /C0 i in$orre$t (e$aue ".#An&er /C0 i in$orre$t (e$aue ".##6 i $al$ulate* (% ivi#6 i $al$ulate* (% iviin- t'e annualin- t'e annual

ivien* of !.:# /"6 @ !"

ivien* of !.:# /"6 @ !"=0 (% t'e !"= ar value. =0 (% t'e !"= ar value. re;uire3ent i "6 of !"=< or !re;uire3ent i "6 of !"=< or !.:# er 'are. Diviin- t'e !.:# (%.:# er 'are. Diviin- t'e !.:# (%

_..

ivie* (% t'e total value of all finan$in- our$e5

ivie* (% t'e total value of all finan$in- our$e5

Given t'at t'e fir3 &ill 3aintain t'e a3e &ei-'t for ea$' finan$in- our$e< ea$' ollar invete 'oul* (e +#6 e;uit%

Given t'at t'e fir3 &ill 3aintain t'e a3e &ei-'t for ea$' finan$in- our$e< ea$' ollar invete 'oul* (e +#6 e;uit%

an* "#6 e(t. T'e firt !"#<### of e;uit% ue in finan$in- ne&

an* "#6 e(t. T'e firt !"#<### of e;uit% ue in finan$in- ne& roe$t i rovie (% retaine* earnin-. T'i our$e ofroe$t i rovie (% retaine* earnin-. T'i our$e of

a3ount of a**itional e(t in$urre if no ne&

a3ount of a**itional e(t in$urre if no ne& e;uit% i iue.e;uit% i iue.

_{A**ition to retaine* earnin- &ill (e5 !.# 3illion}_{A**ition to retaine* earnin- &ill (e5 !.# 3illion}

_..

_An&_{An&er /B0 i $}_{er /B0 i $orre$}_{orre$t. T'e $}_{t. T'e $urrent }_{urrent to$4 }_{to$4 ri$e i}_{ri$e i e;ual to t}_{e;ual to t'e u3 of a}_{'e u3 of all fut}_{ll future ivi}_{ure ivien t}_{en t'at 'av}_{'at 'ave (een i}_{e (een i$oun}_$ounte_te

(% t'e re;uire* rate of return. T'u< t'e i$ountin- of t'e firt ivien a%out i 1 L t'e re;uire* rate of return< !) \

(% t'e re;uire* rate of return. T'u< t'e i$ountin- of t'e firt ivien a%out i 1 L t'e re;uire* rate of return< !) \

1.1". T'e i$ountin- of t'e e$on ivien a%out i 1 L t'e re;uire rate of return ;uare*< ! \ 1.+=". T'e

1.1". T'e i$ountin- of t'e e$on ivien a%out i 1 L t'e re;uire rate of return ;uare*< ! \ 1.+=". T'e

i$ountin- of t'e t'ir ivien a%out i e;ual to 1 L t'e re;uire rate of return $u(e< != \ 1.="#:. T'e i$ountin-

i$ountin- of t'e t'ir ivien a%out i e;ual to 1 L t'e re;uire rate of return $u(e< != \ 1.="#:. T'e i$ountin-

for t'e future ivien t'at in$reae (% 26 i != ti3e 1 L t'e in$reae in ivien< /!= @ 1.#20< ivie* (% t'e

for t'e future ivien t'at in$reae (% 26 i != ti3e 1 L t'e in$reae in ivien< /!= @ 1.#20< ivie* (% t'e

ifferen$e (et&een t'e re;uire rate of return an* t'e in$reae in ivien*< /.1" , .#20. T'i a3ount< !"?.= /=.+ \ .#20<

ifferen$e (et&een t'e re;uire rate of return an* t'e in$reae in ivien*< /.1" , .#20. T'i a3ount< !"?.= /=.+ \ .#20<

i t'en ivie* (% 1 L t'e re;uire* rate of interet $u(e< !"?.= \ 1.="#:. T'erefore< t'e u3 of t'ee nu3(er an t'e

i t'en ivie* (% 1 L t'e re;uire* rate of interet $u(e< !"?.= \ 1.="#:. T'erefore< t'e u3 of t'ee nu3(er an t'e

An&er /A0 i in$orre$t (e$aue !++.++ reult fro3 i$ountin- t'e future ivien t'at in$reae (% 26 (% 1 L t'e

An&er /A0 i in$orre$t (e$aue !++.++ reult fro3 i$ountin- t'e future ivien t'at in$reae (% 26 (% 1 L t'e

ivien (% 1 L t'e re;uire rate of return< 1.1". An&er /D0 i in$orre$t (e$aue !??.=# reult fro3 a failure to

ivien (% 1 L t'e re;uire rate of return< 1.1". An&er /D0 i in$orre$t (e$aue !??.=# reult fro3 a failure to

i$ount t'e ivien at all.

i$ount t'e ivien at all.

_..

t'e a%3ent ivie* (% t'e interet rate< or !2# /!1) \ .1=0. T'i a3ount i t'e reent value at a *ate # %ear in t'e

t'e a%3ent ivie* (% t'e interet rate< or !2# /!1) \ .1=0. T'i a3ount i t'e reent value at a *ate # %ear in t'e

future of t'e annuit% to (e ai* in eretuit% (e-innin- in %ear 1. T'e reent value of !2# i$ounte at 1=6 for #

future of t'e annuit% to (e ai* in eretuit% (e-innin- in %ear 1. T'e reent value of !2# i$ounte at 1=6 for #

An&er /A0 i in$orre$t (e$aue t'e future value of t'e annuit% 3ut (e i$ounte until t'e firt a%3ent /i.e.< for 1

An&er /A0 i in$orre$t (e$aue t'e future value of t'e annuit% 3ut (e i$ounte until t'e firt a%3ent /i.e.< for 1

%ear0. An&er /B0 i in$orre$t (e$aue t'e future value of t'e annuit% 3ut (e of t'e annuit% 3ut (e i$ounte until t'e firt a%3ent /i.e.< fori$ounte until t'e firt a%3ent /i.e.< for

1 %ear0. An&er /C0 i in$orre$t (e$aue t'e i$ountin- i for 1 i$ountin- i for 1 %ear.%ear.

_..

_An&_{An&er /B0 i $}_{er /B0 i $orre$}_{orre$t. T'e t}_{t. T'e total ro}_{otal ro$ee}_{$ee at t'e en}_{at t'e en* of t'e %e}_{* of t'e %ear &ill (}_{ar &ill (e !1}_{e !11) /!1}_{1) /!11# L !)0. Di}_{1# L !)0. Diviin}_{viin- t'e !1}_{- t'e !11) (% 1}_{1) (% 11)6}₁₎₆

/ori-inal invet3ent lu 1)6 return0 reult in !1## a t'e eire to$4 ri$e.

/ori-inal invet3ent lu 1)6 return0 reult in !1## a t'e eire to$4 ri$e.

An&er /A0 i in$orre$t (e$aue !:2.)1 i-nore t'e !) ivien. An&er /C0 i in$orre$t (e$aue !11# oe not

An&er /A0 i in$orre$t (e$aue !:2.)1 i-nore t'e !) ivien. An&er /C0 i in$orre$t (e$aue !11# oe not

$onier t'e eire for a 1)6 return. An&er /D0 i in$orre$t (e$aue !11) &oul* reult in a ero return.

$onier t'e eire for a 1)6 return. An&er /D0 i in$orre$t (e$aue !11) &oul* reult in a ero return.

_..

_D_Daatta_{a --iivveenn5}_{5 E}_EP_PS_{S F}_{F !!))..####H}_{H P}_PE_{E F}_{F ++##]]H}_{H P}_P

CaCal$l$ululatate te t'e 'e riri$e $e of tof t'e 'e tto$o$4 o4 one ne %e%ear far froro3 t3 tooa%a%55

CaCal$l$ululatate te t'e 'e PPE E raratitio oo one ne %e%ear ar frfro3 o3 totoaa%5%5

_..

_{Use the dividend growth model to calculate k}_{Use the dividend growth model to calculate k}