ch14_p2sol

# ch14_p2sol - retained earnings. Solution: Public Function...

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597 CHAPTER #14: WRITING USER-DEFINED FUNCTIONS WITH VBA Solution 2. Create a user-defined function to calculate the value of a common stock using the earnings model that was introduced in Chapter 8 on page 232. a. What arguments will you need to accept in order to implement equation (8-10) exactly as it is displayed? Solution: Public Function EMValue(EPS As Single , RetEarnings As Single , ROE As Single , ReqReturn As Single , GrowthRate As Single ) As Single 'Calculates the value of a common stock using the earnings model 'Solution for problem 2a, chapter 14 EMValue = EPS / ReqReturn + RetEarnings * (ROE / ReqReturn - 1) / (ReqReturn - GrowthRate) End Function b. Now change your function so that it requires the retention ratio, instead of the expected

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Unformatted text preview: retained earnings. Solution: Public Function EMValue2(EPS As Single , RetRatio As Single , ROE As Single , ReqReturn As Single , GrowthRate As Single ) As Single 'Calculates the value of a common stock using the earnings model 'Solution for problem 2b, chapter 14 EMValue2 = EPS / ReqReturn + EPS * RetRatio * (ROE / ReqReturn - 1) / (ReqReturn - GrowthRate) End Function c. Use your function to solve parts a and b of problem 1 on page 244. Worksheet: Error! Reference source not found. Error! Reference source not found.RITING USER-DEFINED FUNCT 598 Text Problem Solutions Formulas:...
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## This note was uploaded on 02/14/2011 for the course FINANCE 615 taught by Professor Green during the Fall '09 term at UMBC.

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ch14_p2sol - retained earnings. Solution: Public Function...

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