What are the ratios to use when deciding to invest in a


1. What are the ratios to use when deciding to invest in a small business?

2. ABC Inc., is expected to pay an annual dividend of $3.8 per share next year. The required return is 13.7 percent and the growth rate is 5.1 percent. What is the expected value of this stock five years from now?

3. ABC is expected to pay a dividend of $1 per share at the end of the year. The stock sells for $100 per share, and its required rate of return is 14.2%. The dividend is expected to grow at some constant rate, g, forever. What is the growth rate (i.e. solve for g)?

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Financial Management: What are the ratios to use when deciding to invest in a
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