Shares Outstanding 10,000

Revenue 1,000,000
Net Profit Margin 30%
Dividend Payout Ratio 60% Retention Ra 40%
Cost of Equity 15%
Terminal Growth Rate 3%
Price per Share (no growth) 120
Price per Share (with growth) 155
PV of Implied Growth 35

Net Income 300,000

Dividends 180,000
Dividend per Share 18

p = D0(1+g)/(r-g) P=D0/r

Years Dividends Discount FacPVs

0 120.00
1 18 0.87 15.65
2 18 0.76 13.61
3 18 0.66 11.84
4 18 0.57 10.29
5 18 0.50 8.95
6 18 0.43 7.78
7 18 0.38 6.77
8 18 0.33 5.88
9 18 0.28 5.12
10 18 0.25 4.45
11 18 0.21 3.87
12 18 0.19 3.36
13 18 0.16 2.93
14 18 0.14 2.54
15 18 0.12 2.21
16 18 0.11 1.92
17 18 0.09 1.67
18 18 0.08 1.45
19 18 0.07 1.26
20 18 0.06 1.10
21 18 0.05 0.96
22 18 0.05 0.83
23 18 0.04 0.72
24 18 0.03 0.63
25 18 0.03 0.55
26 18 0.03 0.48
27 18 0.02 0.41
28 18 0.02 0.36
29 18 0.02 0.31
30 18 0.02 0.27
31 18 0.01 0.24
32 18 0.01 0.21
33 18 0.01 0.18
34 18 0.01 0.16
35 18 0.01 0.14
36 18 0.01 0.12
37 18 0.01 0.10
38 18 0.00 0.09
39 18 0.00 0.08
40 18 0.00 0.07
41 18 0.00 0.06
42 18 0.00 0.05
43 18 0.00 0.04
44 18 0.00 0.04
45 18 0.00 0.03
46 18 0.00 0.03
47 18 0.00 0.03
48 18 0.00 0.02
49 18 0.00 0.02
50 18 0.00 0.02
51 18 0.00 0.01
52 18 0.00 0.01
53 18 0.00 0.01
54 18 0.00 0.01
55 18 0.00 0.01
56 18 0.00 0.01
57 18 0.00 0.01
58 18 0.00 0.01
59 18 0.00 0.00
60 18 0.00 0.00
61 18 0.00 0.00
62 18 0.00 0.00
63 18 0.00 0.00
64 18 0.00 0.00
65 18 0.00 0.00
66 18 0.00 0.00
67 18 0.00 0.00
68 18 0.00 0.00
69 18 0.00 0.00
70 18 0.00 0.00
71 18 0.00 0.00
72 18 0.00 0.00
73 18 0.00 0.00
74 18 0.00 0.00
75 18 0.00 0.00
76 18 0.00 0.00
77 18 0.00 0.00
78 18 0.00 0.00
79 18 0.00 0.00
80 18 0.00 0.00
81 18 0.00 0.00
82 18 0.00 0.00
83 18 0.00 0.00
84 18 0.00 0.00
85 18 0.00 0.00
86 18 0.00 0.00
87 18 0.00 0.00
88 18 0.00 0.00
89 18 0.00 0.00
90 18 0.00 0.00
91 18 0.00 0.00
92 18 0.00 0.00
93 18 0.00 0.00
94 18 0.00 0.00
95 18 0.00 0.00
96 18 0.00 0.00
97 18 0.00 0.00
98 18 0.00 0.00
99 18 0.00 0.00
100 18 0.00 0.00
101 18 0.00 0.00
102 18 0.00 0.00
103 18 0.00 0.00
104 18 0.00 0.00
105 18 0.00 0.00
106 18 0.00 0.00
107 18 0.00 0.00
108 18 0.00 0.00
109 18 0.00 0.00
110 18 0.00 0.00
111 18 0.00 0.00
112 18 0.00 0.00
113 18 0.00 0.00
114 18 0.00 0.00
115 18 0.00 0.00
116 18 0.00 0.00
117 18 0.00 0.00
118 18 0.00 0.00
119 18 0.00 0.00
120 18 0.00 0.00
121 18 0.00 0.00
122 18 0.00 0.00
123 18 0.00 0.00
124 18 0.00 0.00
125 18 0.00 0.00
126 18 0.00 0.00
127 18 0.00 0.00
128 18 0.00 0.00
129 18 0.00 0.00
130 18 0.00 0.00
131 18 0.00 0.00
132 18 0.00 0.00
133 18 0.00 0.00
134 18 0.00 0.00
135 18 0.00 0.00
136 18 0.00 0.00
137 18 0.00 0.00
138 18 0.00 0.00
139 18 0.00 0.00
140 18 0.00 0.00
141 18 0.00 0.00
142 18 0.00 0.00
143 18 0.00 0.00
144 18 0.00 0.00
145 18 0.00 0.00
146 18 0.00 0.00
147 18 0.00 0.00
148 18 0.00 0.00
149 18 0.00 0.00
150 18 0.00 0.00
151 18 0.00 0.00
152 18 0.00 0.00
153 18 0.00 0.00
154 18 0.00 0.00
155 18 0.00 0.00
156 18 0.00 0.00
157 18 0.00 0.00
158 18 0.00 0.00
159 18 0.00 0.00
160 18 0.00 0.00
161 18 0.00 0.00
162 18 0.00 0.00
163 18 0.00 0.00
164 18 0.00 0.00
165 18 0.00 0.00
166 18 0.00 0.00
167 18 0.00 0.00
168 18 0.00 0.00
169 18 0.00 0.00
170 18 0.00 0.00
171 18 0.00 0.00
172 18 0.00 0.00
173 18 0.00 0.00
174 18 0.00 0.00
175 18 0.00 0.00
176 18 0.00 0.00
177 18 0.00 0.00
178 18 0.00 0.00
179 18 0.00 0.00
180 18 0.00 0.00
181 18 0.00 0.00
182 18 0.00 0.00
183 18 0.00 0.00
184 18 0.00 0.00
185 18 0.00 0.00
186 18 0.00 0.00
187 18 0.00 0.00
188 18 0.00 0.00
189 18 0.00 0.00
190 18 0.00 0.00
191 18 0.00 0.00
192 18 0.00 0.00
193 18 0.00 0.00
194 18 0.00 0.00
195 18 0.00 0.00
196 18 0.00 0.00
197 18 0.00 0.00
198 18 0.00 0.00
199 18 0.00 0.00
200 18 0.00 0.00
 Current New
Stockholders' Equity 20,000 22,450 25,200
Book Value per Share 2
# of Shares 2,000
Charter Capital (2$ 2,000 shares) 4,000
ROA 5%
Liabilities 50,000
Cost of Equity 15%
Retention Ratio 70% 70% 70%
Price per Share

Assets 70,000
Net Income 3,500 3,929 4,410
Earnings per Share 1.75
Dividend 0.525
ROE 17.50% 17.50% 17.50%
Growth 12.25% 12.25% 12.25%
Price per Share 21.43

Current New
Stockholders' Equity 20,000 24,900 31,001
Book Value per Share 2
# of Shares 2,000 2,000 2,000
Charter Capital (2$ 2,000 shares) 4,000
ROA 10%
Liabilities 50,000
Cost of Equity 15%
After 5 years, growth will be x% indefinitely 2%
Retention Ratio 70% 70% 70%
Price per Share 18.96

Assets 70,000
Net Income 7,000 8,715 10,850
Earnings per Share 3.5 4.36 5.43
Dividend 1.05 1.31 1.63
ROE 35.00% 35.00% 35.00%
Growth 24.50% 24.50% 24.50%
Price per Share

Years 0 1
Dividends 1.05 1.31
Discounts Factors 1.00 0.87
PVs 1.05 1.14

PVs of first stage 6.70

PV of Terminal value 12.25
Price per Share 18.96
 28,287

Dr. Cash
Cr. Charter Capi

Dr. Cash

70% Cr. Charter Capi

Dr. Cash
Cr. Forex Gain
4,950

17.50%
12.25%

38,596

2,000

70%

13,508
6.75
2.03
35.00%
24.50%

Terminal Value (growth) 24.64

Terminal Value (no growth) 20.94
2 3 4 5 6 7
1.63 2.03 2.52 3.14 3.20 3.27
0.76 0.66 0.57 0.50 0.43 0.38
1.23 1.33 1.44 1.56

PVs of first stage 6.70 35%

PV of TV if no gro 10.41 55%
PV of Terminal va 1.84 10%
Price per Share 18.96 100%
 4,000
4,000

12,000 Gel/USD ex 3

12,000 Gel/USD ex 4

4,000
4,000
Nominal Value 100
Coupon Rate 5%
Term/Tenure 5
Premium/Discount 0%
Yield To Maturity (YTM) 7%

Years 0 1 2
Cash Flows 5 5
Discount Factors 1.00 0.93 0.87
PVs - 4.67 4.37
For Zero Coupon Bonds
1/Discount Factors 1.00 1.07 1.14
Future Values 91.80
Compounded Values 91.80 98.23 105.10

MV of Bond 91.80
 3 4 5
5 5 105
0.82 0.76 0.71
4.08 3.81 74.86

1.23 1.31 1.40

128.75
112.46 120.33 128.75
Nominal Value 100 Lower End 5%
MV of Bond 170 Absolute Distance 38.11
Coupon Rate 20% Differential 5%
Term 7 Relative Distance 0.44
Premium/Discount 0% IRR 7.20%
IRR 7.01%

Years Cash Flows 5% PVs 10% Pvs

0 -170 1.00 (170.00) 1.00 (170.00)
1 20 0.95 19.05 0.91 18.18
2 20 0.91 18.14 0.83 16.53
3 20 0.86 17.28 0.75 15.03
4 20 0.82 16.45 0.68 13.66
5 20 0.78 15.67 0.62 12.42
6 20 0.75 14.92 0.56 11.29
7 120 0.71 85.28 0.51 61.58
NPVs 16.80 (21.32)