Q$1$: YGR Inc. will not pay dividends for $4$ years. At year $5,$ they will pay a dividend of $$1\mathrm{.}85,$ which is expected to grow by $18\mathrm{.}5\%,$ from years $6-10,$ inclusive. Starting in year $11,$ the dividend will grow at $3\mathrm{.}25\%,$ indefinitely. Assume the current rate on long$-$term government bonds is $8\mathrm{.}5\%.$ If the expected return is $11\%,$ calculate the stock price as of today.

Q$2$: PFB Inc.$\text{'}$s dividend $($D$1)$ is $$7,$ and its cost of equity $=12\%,$ while long$-$term corporate bonds $($with a similar risk profile to that of PFB Inc.$)$ average $8\%.$ PFB Inc., whose net income is $$10MM,$ currently has a $100\%$ dividend payout policy and $$300$ in assets. The CFO is considering changing to the plowback ratio to $40\%.$ If implemented, how will investors react to the CFO's decision $($assume PFB Inc.$\text{'}$s liabilities total $$250$ MM$)?$

Q$3$: Company K revenues $=$$$75MM$ and costs $=$$$59MM,$ and Company L revenues $=$$$10MM$ and costs $=$$$8MM$; combined $\frac{?}{?}$ merged revenues $=$$$86MM$ and costs $=$$$66MM($assume a cost of capital $=10\%).$ Company K and Company L stock prices are $$96$ and $$32$ respectively$-$ company K is willing to pay $$38$ for each share of L for which there are $1\mathrm{.}25$ MM O$/$S$-$ what is company K$\text{'}$s NPV on the deal $($company K shares $\frac{O}{S}=5MM?$

Q$4$: Due to inflationary pressures, let us assume that interest rates in Canada and the UK are $4\mathrm{.}25\%$ and $8\mathrm{.}5\%,$ respectively; company V$,$ a Canadian$-$domiciled company, anticipates the following CFs:

Factors Year $1$ Year $2$ Year $3$ Year $4$ Year $5$

N$/$A $5$ MM $6$ MM $8$ MM $12$ MM $14$ MM

Assuming that $1=$$$1\mathrm{.}70($initially$),$ cost of capital $=11\%$ and an upfront investment of $25MM,$ what is the NPV on this project?

Q$5$: If a proposed merger materializes, the acquiring company estimates the combined CFs to be as follows:

$\backslash$table$[[$Years$,1,2,3,4,5,6,7$

Answer all $5$ questions