SUMMARY OUTPUT

Regression Statistics
Multiple R 0.1832432045
R Square 0.033578072
Adjusted R Square 0.0195719571
Standard Error 0.1298683683
Observations 71

ANOVA
df SS MS F Significance F
Regression 1 0.040433826116 0.0404338261 2.3973865861 0.12611286054
Residual 69 1.163739723179 0.0168657931
Total 70 1.204173549296

Coefficients Standard Error t Stat P-value Lower 95%

Alpha 0.0155147041 0.015645114323 0.9916644779 0.3248261351 -0.0156964446
Beta 0.4958270183 0.320229364021 1.548349633 0.1261128605 -0.1430130753

RESIDUAL OUTPUT

Observation Predicted Y Residuals

1 -0.0025956593 0.016595659295
2 0.0428603779 -0.03186037786
3 0.0163444176 0.067655582387
4 0.0024563668 -0.08445636677
5 0.0346812108 0.057318789213
6 0.0198509622 -0.02985096218
7 0.0418320808 -0.01383208078
8 0.0155147041 0.049485295874
9 -0.0185019684 -0.05449803163
10 0.0366489534 -0.08664895338
11 0.0238283071 -0.11582830711
12 0.0440865408 -0.01508654083
13 0.0133430721 -0.05934307213
14 -0.0349579213 -0.01304207874
15 0.0359131122 -0.00991311217
16 0.0386057168 0.039394283169
17 0.0288865223 0.05411347769
18 0.0477625573 -0.04176255729
19 0.0184080812 -0.07540808115
20 0.0279934361 -0.00499343608
21 0.0234583699 -0.00045836989
22 0.0662760016 -0.1242760016
23 -0.0012810303 -0.01571896966
24 -0.0071656567 0.005165656683
25 0.0220976642 0.022902335847
26 0.033380643 0.101619356997
27 0.0038846439 -0.01488464392
28 0.0146933658 -0.04769336579
29 0.0103541243 0.029645875745
30 0.0144188285 -0.04341882854
31 -0.0152756538 -0.00372434621
32 -0.0111765296 -0.05182347039
33 0.0398835479 -0.02588354794
34 0.0336571974 0.11034280263
35 0.0006026134 -0.10260261335
36 0.0068159845 -0.05381598451
37 -0.0145067158 -0.00749328417
38 0.0104735842 0.062526415766
39 0.0353548706 0.007645129369
40 -0.0039027744 0.057902774432
41 0.0054545742 0.091545425758
42 0.004115342 0.031884658031
43 0.073019341 0.117980658962
44 0.0192901421 -0.03929014205
45 -0.0121135909 0.115113590946
46 0.1237847319 -0.08678473195
47 0.0230304883 -0.00703048829
48 0.0319435573 0.051056442737
49 0.0249330288 0.135066971232
50 0.0319239463 -0.01892394625
51 0.0526628319 0.128337168067
52 0.0093930106 -0.04039301062
53 0.0329796376 -0.10297963759
54 -0.0008545776 0.097854577602
55 0.0211269194 -0.19612691939
56 0.0205513898 0.009448610226
57 0.0079908643 -0.45599086426
58 0.0241549181 0.033845081859
59 0.0111345015 -0.0441345015
60 0.0109451469 0.805054853066
61 -0.0037527921 -0.06324720785
62 0.0222073902 -0.00820739023
63 0.018224652 -0.06122465202
64 -0.013915828 -0.10208417196
65 0.0241764448 0.005823555203
66 0.0073577379 0.012642262097
67 0.0682370513 0.044762948651
68 0.0137893641 0.08221063587
69 0.0194550513 -0.03545505129
70 0.0041422531 0.011857746896
71 0.026608523 -0.06660852297
 Upper 95% Lower 95.0% Upper 95.0%
0.0467258528 -0.0156964446 0.0467258528
1.1346671118 -0.1430130753 1.1346671118
Year Month S&P 500 Price returns Star Price returns
1979 1 99.93 26.94 0.021
2 96.28 -0.037 0.963 27.31 0.014
3 101.59 0.055 1.055 27.61 0.011
4 101.76 0.002 1.002 29.93 0.084
5 99.08 -0.026 0.974 27.48 -0.082
6 102.91 0.039 1.039 30.01 0.092
7 103.81 0.009 1.009 29.71 -0.010
8 109.32 0.053 1.053 30.54 0.028
9 109.32 0.000 1.000 32.52 0.065
10 101.82 -0.069 0.931 30.15 -0.073
11 106.16 0.043 1.043 28.64 -0.050
12 107.94 0.017 1.017 26.01 -0.092
1980 1 114.16 0.058 1.058 26.76 0.029
2 113.66 -0.004 0.996 25.53 -0.046
3 102.09 -0.102 0.898 24.30 -0.048
4 106.29 0.041 1.041 24.94 0.026
5 111.24 0.047 1.047 26.88 0.078
6 114.24 0.027 1.027 29.11 0.083
7 121.67 0.065 1.065 29.29 0.006
8 122.38 0.006 1.006 27.62 -0.057
9 125.46 0.025 1.025 28.25 0.023
10 127.47 0.016 1.016 28.90 0.023
11 140.52 0.102 1.102 27.23 -0.058
12 135.76 -0.034 0.966 26.76 -0.017
1981 1 129.55 -0.046 0.954 26.71 -0.002
2 131.27 0.013 1.013 27.91 0.045
3 136 0.036 1.036 31.68 0.135
4 132.81 -0.023 0.977 31.33 -0.011
5 132.59 -0.002 0.998 30.30 -0.033
6 131.21 -0.010 0.990 31.51 0.040
7 130.92 -0.002 0.998 30.60 -0.029
8 122.79 -0.062 0.938 30.02 -0.019
9 116.18 -0.054 0.946 28.12 -0.063
10 121.89 0.049 1.049 28.52 0.014
11 126.35 0.037 1.037 32.62 0.144
12 122.55 -0.030 0.970 29.30 -0.102
1982 1 120.4 -0.018 0.982 27.92 -0.047
2 113.11 -0.061 0.939 27.31 -0.022
3 111.96 -0.010 0.990 29.30 0.073
4 116.44 0.040 1.040 30.56 0.043
5 111.88 -0.039 0.961 32.21 0.054
6 109.61 -0.020 0.980 35.33 0.097
7 107.09 -0.023 0.977 36.61 0.036
8 119.51 0.116 1.116 43.60 0.191
 9 120.42 0.008 1.008 42.73 -0.020
10 113.71 -0.056 0.944 47.13 0.103
11 138.54 0.218 1.218 48.87 0.037
12 140.64 0.015 1.015 49.65 0.016
1983 1 145.3 0.033 1.033 53.77 0.083
2 148.06 0.019 1.019 62.38 0.160
3 152.96 0.033 1.033 63.19 0.013
4 164.42 0.075 1.075 74.62 0.181
5 162.39 -0.012 0.988 72.31 -0.031
6 168.11 0.035 1.035 67.25 -0.070
7 162.56 -0.033 0.967 73.77 0.097
8 164.4 0.011 1.011 60.86 -0.175
9 166.07 0.010 1.010 62.69 0.030
10 163.55 -0.015 0.985 34.60 -0.448
11 166.4 0.017 1.017 36.61 0.058
12 164.93 -0.009 0.991 35.40 -0.033
1984 1 163.41 -0.009 0.991 64.29 0.816
2 157.06 -0.039 0.961 59.98 -0.067
3 159.18 0.013 1.013 60.82 0.014
4 160.05 0.005 1.005 58.21 -0.043
5 150.55 -0.059 0.941 51.46 -0.116
6 153.18 0.017 1.017 53.00 0.030
7 150.66 -0.016 0.984 54.06 0.020
8 166.68 0.106 1.106 60.17 0.113
9 166.1 -0.003 0.997 65.94 0.096
10 167.42 0.008 1.008 64.89 -0.016
11 163.58 -0.023 0.977 65.93 0.016
12 167.24 0.022 1.022 63.29 -0.040
1.007 9.1% return on market
1.021
1.014
1.011
1.084
0.918
1.092
0.990
1.028
1.065
0.927
0.950
0.908
1.029
0.954
0.952
1.026
1.078
1.083
1.006
0.943
1.023
1.023
0.942
0.983
0.998
1.045
1.135
0.989
0.967
1.040
0.971
0.981
0.937
1.014
1.144
0.898
0.953
0.978
1.073
1.043
1.054
1.097
1.036
1.191
0.980
1.103
1.037
1.016
1.083
1.160
1.013
1.181
0.969
0.930
1.097
0.825
1.030
0.552
1.058
0.967
1.816
0.933
1.014
0.957
0.884
1.030
1.020
1.113
1.096
0.984
1.016
0.960
1.012 15.7% return on equity Star
HOME APPLIANCES
Beta ROE Payout PBR g r Price
magic chef 1.35 22.2 0.1600 0.8400 0.1865 0.2125 34
maytag 0.9 27.6 0.6000 0.4000 0.1104 0.1714 43
national presto 0.9 10.1 0.4500 0.5500 0.0556 0.0936 28
ranco 0.8 14.6 0.4400 0.5600 0.0818 0.1288 19
robertshaw 0.95 17.5 0.2600 0.7400 0.1295 0.1635 30
toro 0.65 11.1 0.1800 0.8200 0.0910 0.1130 16
whirlpool 1 17.2 0.4200 0.5800 0.0998 0.1428 46
white consolidated 1.05 9.5 0.6800 0.3200 0.0304 0.0804 30

0.2500

0.2000
f(x) = 0.116215517241379 x + 0.02782900862069
Expected Return

0.1500

0.1000

0.0500

0.0000
0.6 0.7 0.8 0.9 1 1.1 1.2 1.3 1.4
Beta
Div Yield Div
0.026 0.88
0.061 2.62
0.038 1.06
0.047 0.89
0.034 1.02
0.022 0.35
0.043 1.98
0.050 1.50

Market's expected return, according to pg 254 "Beta Service", is the value where
beta is equal to 1.0.
Which is 14.4% in this case.
5-year note rf beta rm r (using CAPM)
0.118 1.1180 0.1236 0.4958 (Sean) 0.144 0.1386
0.1365 1.1365 0.733 (Nicky)
0.1274 1.1274
0.1125 1.1125
Mean 0.1236

PVGO = P - EPS/r r = EPS / (P - PVGO)

1984 1985
P $49.14 $57.78
EPS $3.51 $3.46
r 0.1386 0.1386
PVGO $23.81 $32.81
PVGO, % 48.45% 56.78%
 1979 1980 1981 1982 1983 1984 1985
Shares 14382.518 14382.518 14382.518 14382.518 14382.518 14382.518 14382.518
Dividends $23,002 $22,926 $25,110 $23,802 $29,991 $32,697 $33,424
Dividend per share $1.60 $1.59 $1.75 $1.65 $2.09 $2.27 $2.32
NI $37,125 $29,125 $31,341 $29,682 $48,552 $50,175 $49,488
EPS $2.58 $2.02 $2.18 $2.06 $3.38 $3.51 $3.46
Dividend Yield, % 6.7 7.1 7.1 5.4 4.4 4.6 4.0
P/E Ratio 9.2 11 11.2 14.9 14.1 14 16.7
Price $23.74 $22.22 $24.42 $30.69 $47.66 $49.14 $57.78
*using annual compounding
g= 7.4%

g= 8.9%
g= 9.0% $3.44
g= -9.7% 3.7
g= 9.4%
g= 19.2% $57.78
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.8936590039
R Square 0.7986264153
Adjusted R Square 0.7482830192
Standard Error 0.0327237172
Observations 6

ANOVA
df SS MS F Significance F
Regression 1 0.016987380772 0.0169873808 15.863578466 0.01636133751
Residual 4 0.004283366659 0.0010708417
Total 5 0.021270747431

Coefficients Standard Error t Stat P-value Lower 95%

log S0 4.3059621919 0.030464122769 141.34535317 1.502727E-08 4.2213802274
log 1+g 0.0311561787 0.007822464591 3.9829108031 0.0163613375 0.0094375352
SO 20228.430699
1+g 1.0743757043
g 0.0743757043
RESIDUAL OUTPUT

Observation Predicted Y Residuals

1 4.3371183707 0.024647228443
2 4.3682745494 -0.00794626132
3 4.3994307281 0.000415984594
4 4.4305869068 -0.05397345599
5 4.4617430856 0.01524786126
6 4.4928992643 0.02160864301
 Upper 95% Lower 95.0% Upper 95.0%
4.3905441565 4.2213802274 4.3905441565
0.0528748222 0.0094375352 0.0528748222
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.6517159245
R Square 0.4247336462
Adjusted R Square 0.2809170578
Standard Error 0.0901582554
Observations 6

ANOVA
df SS MS F Significance F
Regression 1 0.024005938102 0.0240059381 2.9533008036 0.16082895297
Residual 4 0.032514044046 0.008128511
Total 5 0.056519982148

Coefficients Standard Error t Stat P-value Lower 95%

Intercept 4.4352413043 0.083932767995 52.842786081 7.676659E-07 4.20220658149
X Variable 1 0.0370373851 0.021551945237 1.7185170362 0.160828953 -0.0228004078
So 27242.14526
1+g 1.0890238349
g 0.0890238349
RESIDUAL OUTPUT

Observation Predicted Y Residuals

1 4.4722786894 0.097387772928
2 4.5093160745 -0.04505014042
3 4.5463534595 -0.05024061008
4 4.5833908446 -0.11089768381
5 4.6204282296 0.065778894875
6 4.6574656147 0.043021766499
 Upper 95% Lower 95.0% Upper 95.0%
4.6682760272 4.2022065815 4.6682760272
0.0968751779 -0.0228004078 0.0968751779
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.6539896711
R Square 0.4277024899
Adjusted R Square 0.2846281124
Standard Error 0.0908732531
Observations 6

ANOVA
df SS MS F Significance F
Regression 1 0.024686076113 0.0246860761 2.9893716635 0.158871998
Residual 4 0.033031792485 0.0082579481
Total 5 0.057717868598

Coefficients Standard Error t Stat P-value Lower 95%

Intercept 0.2757987238 0.084598394617 3.2600940608 0.0310780575 0.04091592521
X Variable 1 0.0375583935 0.021722862376 1.7289799489 0.158871998 -0.0227539414
SO 1.8871165519
1+g 1.090331084
g 0.090331084
RESIDUAL OUTPUT

Observation Predicted Y Residuals

1 0.3133571173 0.09826258864
2 0.3509155108 -0.04556414136
3 0.3884739043 -0.05001741068
4 0.4260322978 -0.11216507739
5 0.4635906912 0.065326009038
6 0.5011490847 0.044158031747
 Upper 95% Lower 95.0% Upper 95.0%
0.5106815225 0.0409159252 0.5106815225
0.0978707284 -0.0227539414 0.0978707284
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.8801342995
R Square 0.7746363851
Adjusted R Square 0.7182954814
Standard Error 0.050248471
Observations 6

ANOVA
df SS MS F Significance F
Regression 1 0.034715209175 0.0347152092 13.749094068 0.02069057686
Residual 4 0.010099635366 0.0025249088
Total 5 0.044814844542

Coefficients Standard Error t Stat P-value Lower 95%

Intercept 0.9170859408 0.04677878076 19.604742276 3.992188E-05 0.7872072239
X Variable 1 -0.0445390417 0.012011682032 -3.7079770857 0.0206905769 -0.0778888175
SO 8.2620142702
1+g 0.9025285693
g -0.0974714307
RESIDUAL OUTPUT

Observation Predicted Y Residuals

1 0.872546899 -0.04647209632
2 0.8280078573 0.02325049143
3 0.7834688156 0.067789533164
4 0.7389297738 -0.006536014
5 0.6943907321 -0.0509380556
6 0.6498516904 0.012906141328
 Upper 95% Lower 95.0% Upper 95.0%
1.0469646576 0.7872072239 1.0469646576
-0.011189266 -0.0778888175 -0.011189266
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.8877673069
R Square 0.7881307912
Adjusted R Square 0.735163489
Standard Error 0.0421136314
Observations 6

ANOVA
df SS MS F Significance F
Regression 1 0.026389783358 0.0263897834 14.879572081 0.01818741465
Residual 4 0.0070942318 0.001773558
Total 5 0.033484015158

Coefficients Standard Error t Stat P-value Lower 95%

Intercept 0.9512404683 0.039205657203 24.262836952 1.711917E-05 0.8423881133
X Variable 1 0.0388328163 0.010067083419 3.8574048376 0.0181874146 0.0108821118
SO 8.9380024286
1+g 1.0935353236
g 0.0935353236
RESIDUAL OUTPUT

Observation Predicted Y Residuals

1 0.9900732846 -0.02628545727
2 1.0289061009 0.012486584262
3 1.0677389172 -0.01852089451
4 1.1065717335 0.066614534951
5 1.1454045497 0.003814562911
6 1.184237366 -0.03810933035
 Upper 95% Lower 95.0% Upper 95.0%
1.0600928234 0.8423881133 1.0600928234
0.0667835208 0.0108821118 0.0667835208
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.9225596089
R Square 0.8511162321
Adjusted R Square 0.8138952901
Standard Error 0.0668284911
Observations 6

ANOVA
df SS MS F Significance F
Regression 1 0.102123296256 0.1021232963 22.866595701 0.00876331569
Residual 4 0.017864188896 0.0044660472
Total 5 0.119987485152

Coefficients Standard Error t Stat P-value Lower 95%

Intercept 1.2270391922 0.062213939442 19.722898167 3.898178E-05 1.05430560455
X Variable 1 0.0763912098 0.015975064899 4.7819029373 0.0087633157 0.03203731902
SO 16.867052324
1+g 1.1923155549
g 0.1923155549
 Upper 95% Lower 95.0% Upper 95.0%
1.3997727798 1.0543056045 1.3997727798
0.1207451005 0.032037319 0.1207451005
SUMMARY OUTPUT

Regression Statistics
Multiple R 0.8897536817
R Square 0.791661614
Adjusted R Square 0.7395770175
Standard Error 0.0340074016
Observations 6

ANOVA
df SS MS F Significance F
Regression 1 0.017578312624 0.0175783126 15.199534361 0.01756139536
Residual 4 0.004626013457 0.0011565034
Total 5 0.022204326082

Coefficients Standard Error t Stat P-value Lower 95%

Intercept 0.1467430568 0.031659167957 4.6350888624 0.0097698759 0.05884311489
X Variable 1 0.0316934537 0.008129323867 3.8986580205 0.0175613954 0.00912283224
SO 1.4019839983
1+g 1.0757056599
g 0.0757056599
 Upper 95% Lower 95.0% Upper 95.0%
0.2346429987 0.0588431149 0.2346429987
0.0542640752 0.0091228322 0.0542640752
Year t Dividends Log Dividends NI Log NI EPS
1979 1 23002 4.36176559911 37125 4.5696664623 2.58
1980 2 22926 4.36032828807 29125 4.464265934 2.02
1981 3 25110 4.39984671271 31341 4.4961128494 2.18
1982 4 23802 4.37661345086 29682 4.4724931607 2.06
1983 5 29991 4.47699094683 48552 4.6862071245 3.38
1984 6 32697 4.5145079073 50175 4.7004873812 3.51
Log EPS Dividend Yield Log Div Yield P/E Ratio Log PE ratio Price Log Price DIV/Share
0.4116197059632 6.7 0.826074802701 9.2 0.963787827 23.736 1.375408 1.6
0.3053513694466 7.1 0.851258348719 11 1.041392685 22.22 1.346744 1.59
0.3384564936046 7.1 0.851258348719 11.2 1.049218023 24.416 1.387675 1.75
0.3138672203692 5.4 0.732393759823 14.9 1.173186268 30.694 1.487053 1.65
0.5289167002777 4.4 0.643452676486 14.1 1.149219113 47.658 1.678136 2.09
0.5453071164658 4.6 0.662757831682 14 1.146128036 49.14 1.691435 2.29
Log DIV/Share
0.20411998266
0.20139712432
0.24303804869
0.21748394421
0.32014628611
0.35983548234