1. Dilworth is in steady-state growth (in earnings and dividends). Its per-share annual dividends have increased from $3.00 to $4.00 in the last 8 years, and analysts expect this rate of growth to continue in the foreseeable future. Calculate the growth rate.
2. Creative Centers Inc. has an EBIT of $200,000, $30,000 in depreciation, $450,000 in outstanding debt, a forward-looking EV/EBITDA multiple of 7.50, and an estimated cost of capital of 10%. Use the EV/EBITDA approach to value the firm.
3. Calculate the market value if you have a $1000 bond. The bond has a coupon interest rate of 8%. It is discounted at 6% and will mature in 20 years. Annual interest is paid.