An analyst presents you with the following pro forma (in millions of dollars). The pro forma gives her forecasts of earnings and dividends for 2010-2014. She asks you to value the 1,380 million shares outstanding at the end of 2009. Use a required return for equity of 10 percent in your calculations. (This is the same pro forma that was used for a residual earnings valuation in Exercise E5.3.)

a. Forecast growth rates for earnings and cum-dividend earnings for each year, 2011-2014.
b. Forecast abnormal earnings growth for each of the years 2011-2014.
c. Calculate the per-share value of the equity at the end of 2009 from this pro forma. Would you call this a Case 1 or Case 2 abnormal earnings growth valuation?
d. What is the forward P/E ratio for this firm? What is the normal forwardP/E?

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2010E 2011E 2012E 2013E 2014E 388.0 570.0 99.0 629.0 660.45 Dividens 15.0 160.0 349.0 367.0 385.40