$1.$ Based on the following information on a hypothetical company, perform an equity evaluation using residual earnings $($RE$)$ model. You should also make an investment recommendation based on your work.

Current market price per share AU$ $18\mathrm{.}00$

Current P$/$B ratio $1\mathrm{.}5$

Company$$s market beta $0\mathrm{.}8$

Australian average risk$-$free rate $2\mathrm{.}5\%$

Australian average share market return $9\%$

Company$$s sustainable long$-$term growth rate after $5$ years $3\%$

Company$$s cost of capital $8\%$

Company$$s dividend payout ratio $40\%$

Forecasted ROCE for the next $5$ years $15\%,14\%,13\%,12\%,11\%$

Note: ROCEt $=$ Earningst $/$ Book Valuet$-1$