$($a$)$

Persephone, which will be a stable growth firm next year, has just reported the

following year$-$end results:

Persephone's beta is $1\mathrm{.}10.$ The risk$-$free rate and the market risk premium are

expected to be $2\mathrm{.}0\%$ and $5\mathrm{.}5\%,$ respectively. The Company is expected to

maintain a stable competitive moat of $50$ basis points.

Estimate Persephone's share price using the dividend discount method $($DDM$).$

State any assumptions. Can you explain the use of competitive moat in the calculations?

$(10$ marks$)$

$($b$)$

Dividends plans are only one way that a company can return cash to shareholders.

Explain the other methods via which firms return cash to shareholders, the

implications of these for shareholders, and how you would modify the DDM to

account for this.

$(10$ marks$)$

$($c$)$

Explain how to integrate ESG information into equity valuations.

$(15$ marks$)$

$($Total: $35$ Marks$)$