Reference no: EM133068775

1. You anticipate that Canuck Industries will make total payouts of ?$4.675 billion at the end of this year. Assume that all payouts occur annually at the end of the year and that we are at the beginning of the year. Analysts forecast that? Canucks payouts will grow at a constant rate in perpetuity. Your company requires a return of 12?% on all new investments. Canuck has 1.4609 billion shares outstanding and its shares are currently trading for ?$40.00. What growth rate have you assumed in estimating Canuck Industries' upcoming payouts?

2. The current P/E ratio for Avalanche Inc. is 9.77. The company earned $4.35 per share and paid a dividend of $1.25 last year. You estimate that Avalanche Inc. will continue to grow at an annual rate of 13% over the next 6 years. What do you anticipate as the expected stock price in 6 years? ( Be careful with rounding errors as you do this question. Make sure you are storing your information when possible. Round your answer to the nearest cent. what is the current stock price of Avalanche Inc.?

3. Your client is considering the purchase of a bond. You have been asked to calculate the price of the outstanding bond. The bond pays a 6% coupon rate and has 12 years left until maturity. Coupons are paid semi-annually. What would you advise your client as the most they would be willing to pay if they require a 7% return on their investment?f your client was able to negotiate a purchase price of $900 for the bond, what would be their Yield to Maturity on this investment if they made the purchase and held the bond until maturity?

4. A client approached you with a question. They are looking at Treasury Bills. For $999.06 they can purchase a 1 Year Treasury Bill that will pay them $1000 with no coupon payments. They want to know their return on an investment expressed as a percentage. What do you tell them?