1. Discount Outlet has net income of $389,100, a profit margin of 2.8 percent, and a return on assets of 8.6 percent. What is the capital intensity ratio?
2. Gruber Corp. pays a constant $9 dividend on its stock. The company will maintain this dividends for the next 12 years and will then cease paying dividends forever (you should assume the company disappears with no extra payouts). If the required return on this stock is 10%, what is the current share price?
3. A 4-year French FRN pays 3-mo Euribor + 125bps and is priced at 98. What is the discount margin for the note assuming 3-mo Euribor stays at 2%? (Assume a 30/360 day count convention and evenly spaced periods).