1. Draw a simple balance sheet that shows an insolvent bank
2. What are the four steps of capital budgeting analysis?
3. A company's current dividend per share was $2 per share. The company expects that the dividends will grow at 10% for the next three years. After that the dividends will increase at 3%. Its stock beta is 1.2. Currently, the expected market return is 10%, and the risk-free rate is 5%. What is the present value of the common stock?