An analyst develops the following pro forma at the end of 2009 (in millions):

a. Forecast the cum-dividend operating income growth rate for 2011 using a 9 percent return for reinvesting cash flows.
b. You consider 9 percent to be a reasonable return for investing in the operations of this firm and also view the GDP growth rate of 4 percent to be a reasonable long-term growth rate. The 450 million shares of the firm are trading at $52 each. Do you consider them to be cheap orexpensive?

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2009A 2010 2011E S 868 7,190 Operating income Net operating assets Net financial obligations Common equity $6,400 6,848 756 $5,644