1. EPS next year is expected to be $6.20 for WIL, Inc. WILs dividend payout ratio is 60% and its dividend growth rate is expected to be 5.0%. WILs price-earnings ratio is 16.50
   1. Compute WILs stock price.
   2. Compute WILs required rate of return (market capitalization rate).
   3. What is the value of WILs PVGO?
   4. Would you recommend that WIL increase, decrease, or leave unchanged its plowback ratio? Explain.

1. Assume all bonds pay semi-annual coupons unless otherwise instructed. Assume all bonds have par values per contract of $1,000.

1. Initial margins on equity are 50% with a 40% maintenance margin. Initial margins on short sales are 150% (50%) with a 130% (30%) maintenance margin.

1. Futures contract information:

Soybeans: price quote (e.g., 1184) is cents/bushel; contract size 5,000 bushels; margin is $4,725/contract

Crude oil: price quote (e.g., 98.65) is dollars/barrel; contract size 1,000 barrels; margin is $9,000/contract

Gold: price quote (e.g., 1,955.50) is dollars/ounce; contract size 100 ounces

E-mini S&P 500 Index: price quote is in index value (e.g., 4,145.50); contract size is a $50 multiple of the price quote; margin is 12,650