Security Analysis and Valuation - Do not open until...

Do not open until instructed to do so!
Principles of Finance - Fall 2010
Exam 3 – Security Analysis and Valuation
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Your version number is 2. Your answer sheet number is 1. Please enter these on the SCANTRON now.
Please mark each answer on the scantron in pencil. Use the space by the problem for calculations; no other
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please choose that one. There are multiple versions of the exam, but all are equally easy. Good luck!
( 29






+
=
N
r
FV PV
1
1
PV of Perpetuity =
r
PMT
1
1
0
0
xE
E
P
P =
Ann. due adj. = (1 + r)
( 29






+
- =
N
A
r r
r
PMT PV
1
1 1
g r
D
Po
-
= 1
E(r
i
) = R
f
+ [ E(R
m
) - R
f
] β
I
g
P
D
R
O
+ = 1
P
P
P
P
D
R =
1
D
=
0
D
* (1+g)
T
Y
Y MUNI
TAX
-
=
1
N
r PV FV ) 1 ( + =
) 1 (
SEMI
YTM EAY + =
2
-1
1
1
-






=
N
PV
FV
R

Do not open until instructed to do so!
20 Multiple Choice worth 4 points each = 80 points Version 2-1
Use this info for the next 2 problems.
Suppose you saw this stock information in the Wall Street Journal :
52 wk. Yld Vol
Hi Lo Stock ________ Sym Div % P/E 100s
60 36 Tiffany & Co. TIF ??? 1.8 23 20,000
1. If the dividend is constantly growing at 5%, what is the value of the stock today if the required rate of return is 10%?
Close Chg
56 - .25
$24.54