Question: Exhibit 13.7 presents selected hypothetical data from projected financial statements for Steak 'n Shake for Year +1 to Year +11. The amounts for Year +11

Exhibit 13.7 presents selected hypothetical data from projected for Steak 'n Shake for Year +1 to Year +11. The amounts for Year +11 reflect a long-term growth assumption of 3%. The capital is 9.34%. Assume net income and comprehensive income will be identical.
REQUIRED
a. Compute the value of Steak 'n Shake as of January 1, Year þ1, using the residual income model.
b. Repeat Requirement a using the present value of expected free cash flows to the common equity shareholders.
c. Repeat Requirement a using the discount model.
d. Identify the reasons for any differences in the valuations in Requirements a-c.
e. Suppose the market value of Steak 'n Shake on January 1, Year þ1, is $309.98 million. Based on your valuations in Requirements a-c, what is your assessment of the market value of this firm?

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