Question: Based on the information given below, what is the fair value of the equity per share of the following company, in million dollars, as of

Based on the information given below, what is the fair value of the equity per share of the following company, in million dollars, as of the end of FY2021, if you believe that the dividend discount model is the most appropriate valuation method? Assume that the cash flows will grow by 1% each year after FY2026.

FY2022

FY2023

FY2024

FY2025

FY2026

FCFF (million AUD)

300

310

330

350

370

FCFE (million AUD)

250

270

280

290

300

DPS (AUD)

8

9

6

5

6

D/E ratio

1.30

1.30

1.32

1.25

1.27

Cost of equity

4.0%

4.0%

4.0%

4.0%

4.0%

WACC

2.5%

2.5%

2.5%

2.5%

2.5%

Outstanding shares (million)

1.35

1.35

1.35

1.35

1.35

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