Equity asset valuation Angela Figueroa, CFA, is an equity analyst working for a local brokering house. He is also the manager of his parents' equity portfolio. Figueroa's parents are planning on retiring in two years. In anticipation of this Figueroa has decided to tilt his parents' portfolio towards higher dividend paying stocks. Given that his area of expertise in terms of analysis is the local manufacturing sector, Figueroa has identified SomeoneSmokin' INC, a manufacturer of cigarettes in the local economy. Figueroa decides to take a closer look at both the industry prospects for the sector as well as the firm's financial performance. Figueroa analysis of the domestic tobacco industry is summarized as follows. Exhibit 1: Industry Analysis 1. The industry is highly concentrated with three players accounting for 95% of the domestic market for cigarettes. 2. All three players offer similar products while individuals are more likely to switch to the lowest priced vendor. 3. After a devastating price war three years ago which impacted the profits of all cigarettes manufacturers, the three incumbent players are now more likely to cooperate when it comes. to the pricing of cigarettes with players having tacit agreements with each other.