e. Using the required rate of return on common equity from Requirement a (7.5%) as a discount rate and the long-run growth rate from Requirement c (3%), compute the continuing value of Starbucks as of the start of Year 6 based on Starbucks continuing residual income in Year 6 and beyond. After computing continuing value as of the start of Year 6, discount it to present value at the start of Year 1. = 7.5 points

Comprehensive income esimates: Year 1- 1573, Year 2- 1793, Year 3-2038, Year 4- 2303, Year 5- 2871, Year 6- 2958

Common shareholders equity estimates: Year 1- 5499, Year 2- 6409, Year 3- 7123, Year 4- 8086, Year 5- 9862, Year 6- 10157

Year	1	2	3	4	5	6
Comprehensive income	1573	1793	2038	2303	2871	2958
Common shareholders equity	5499	6409	7123	8086	9862	10157
required earnings	412.43	480.68	534.23	606.45	739.65	761.478
residual income	1160.57	1312.32	1503.77	1696.55	2131.35	2196.522
PV factor	0.93	0.87	0.8	0.75	0.7
PV residual income	1079.33	1141.718	1203.016	1272.413	1491.945
Total PV residual income	6188.422