MATH 246 Midterm: Practice Exam 3 Solutions Spring 2011
14 Mar 2019
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The answers on this exam are entirely my own work. I neither gave nor received any aid while taking this exam. You have 75 minutes to take this exam. Please remember to write your name legibly on every page. This exam will be graded out of 96 points. The number in parentheses for each question is the amount of points assigned to the question. The exam has five questions and 11 pages, including this page and a page of scratch paper at the end. Question 1: a stock valuation model (19 points) Consider the total payout model of stock valuation. Supersocks inc. pays out 30 percent of its earnings in the form of stock buybacks and pays out 10 percent of its earnings in the form of dividends. The firm"s earnings this year were mm, and the firm has just done its annual stock buyback and made its annual dividend payment.
