Robert Campbell and Carol Morris are senior vice-presidents of the Mutual of Chicago Insurance Company. They are co-directors of the company’s pension fund management division. A major new client has requested that Mutual of Chicago present an investment seminar to illustrate the stock valuation process. As a result, Campbell and Morris have asked you to analyze the Bon Temps Company, an employment agency that supplies word processor operators and computer programmers to businesses with temporarily heavy workloads. You are to answer the following questions.

Bon Temps has an issue of preferred stock outstanding that pays stockholders a dividend equal to $10 each year. If the appropriate required rate of return for this stock is 8%, what is its market value?

Assume that Bon Temps is a constant growth company whose last dividend (D0, which was paid yesterday) was $2 and whose dividend is expected to grow indefinitely at a 6% rate. The appropriate rate of return for Bon Temps’ stock is 16%.

      (1) What is the firm’s expected dividend stream over the next 3 years?

      (2) What is the firm’s current stock price?

      (3) What is the stock’s expected value one year from now?

      (4) What are the expected dividend yield, the capital gains yield, and the total return during the first year?

Assume that Bon Temps’ stock is currently selling at $21.20. What is the expected rate of return on the stock?

What would the stock price be if its dividends were expected to have zero growth?

Assume that Bon Temps is expected to experience supernormal growth of 30% for the next 3 years, then to return to its long-run constant growth rate of 6%. What is the stock’s value under these conditions? What are its expected dividend yield and its capital gains yield in Year 1? In Year 4?

Suppose Bon Temps is expected to experience zero growth during the first three years and then to resume its steady-state growth of 6% in the fourth year. What is the stock’s value now? What are its expected dividend yield and its capital gains yield in Year 1? In Year 4?

Bon Temps’ financial statements show the following information:

              Average cost of funds                  10.0 %

              EBIT                                      $  500,000

              Total capital                          $1,250,000

              EPS                                                 $2.00

              Shares outstanding                     150,000

              Marginal tax rate                           30.0%

       Compute the company’s economic value added (EVA)

• Suppose that normally Bon Temps’ P/E ratio is 20x. Using the information given in part (g), estimate the market price per share for Bon Temps’ common stock.

I will pay for the following essay Effective Learning Environment. The essay is to be 6 pages with three to five sources, with in-text citations and a reference page.

In this area, there are cushions and stools where the children can read independently. Independent reading includes rules like “no talking,” and basically, just reading to oneself. The reading corner also features books of authors they are currently studying as a class.

Through this reading corner and through the rules of “no talking,” a learning environment is established. This corner is therefore highly beneficial to all the children. Most importantly, the teacher has established a comfortable environment in placing the cushions and stools. However as this reading corner has its own routine, and as it focuses on an author or a theme, the English outcomes are still being accomplished based on the English Syllabus. Under these conditions, the class is working at Stage 2, Learning to Read- Reading and Viewing Texts (Board of Studies, 2007, pg 29).

The way in which Mrs. Daniels has designed the corner for reading is bound to attract the children’s attention as the space is exclusively for the children. The corner will encourage them to read, and have moments to read to themselves. Hence, attracting children’s attention and getting them excited to read links to their literacy as declared by Radcliffe (2007) in her article about literacy in the classroom. She states that “acknowledging students’ attitudes and beliefs has become (the) first step toward the literacy divide” (Radcliffe, 2007). The teacher has accomplished this by encouraging the students to read the reading materials that Mrs. Daniel uses and the activities that are related to literacy. In addition, an overall effort in organising the ‘library’ and choosing books children are interested in reveals that reading for the students’ learning is very important.

More importantly, as the class may have different abilities, Mrs. Daniels adjusts to pedagogical practice (Winch, Johnston, Holliday, Lijungdhal & March, 2010).