Part A$.$ As an equity security analyst, your current task is to estimate the fair value of an Australian stock in operation as of the end of $2024.$

$$ Stock selection criteria:

$1.$ The stock must be a constituent of the ASX$200$ index;

$2.$ the firm should operate in high carbon emission industries, such as companies of fossil fuel, mining, steel, aluminum, cement, fertilizer manufacturing, or in the transportation sector.

Approach: You have decided to use a Free Cash Flow to the Firm $($FCFF$)$ model and a Multiples$-$based approach, and then assign a different weight for each model result to determine the stock$$s intrinsic value.

$$For the FCFF approach, you agree with the annual consensus forecasts $($e$.$g$.,$ earnings, free

cash flows$)$ for the chosen stock over the next three $($or four$)$ fiscal years. Beyond this time, you will derive estimates of long$-$term growth rates. Use the Capital Asset Pricing Model to estimate the equity cost of capital. Assume a risk$-$free rate of $4\mathrm{.}38\%$ and a market risk premium of $5\mathrm{.}99\%.$ For the Multiples$-$based approach, you will select a multiple for your stock and its comparable stocks $($at least two$)$ and justify your choices of multiples as well as comparable.

Requirement: In your written report to the fund manager, you are expected to incorporate the following:

$1.$Describe the valuation process for each method so one can replicate the analysis.

$2.$Justify your primary considerations for valuation.

$3.$Report your valuation results and provide an investment recommendation $($buy$,$ sell, or hold$)$ based on the results from two different valuation methods.

Part B$.$ Several days after handing in the report in Part A$,$ your fund manager requests a revision of the FCFF stock valuation to account for his predicted early introduction of a carbon tax on Scope $1$ emissions $($priced per ton of greenhouse gas$).$ The revision should address the following key considerations for your FCFF valuation: a$.$ projections of sales revenue and operating costs, b$.$ capital expenditures $($including Research and development expenses$),$ c$.$ taxation, and d$.$ cost of capital.

Requirements: Based on the firm$$s environmental performance disclosures, write a response to evaluate the above aspects and potential directional impacts on your stock valuation recommendation. Support your analysis with quantitative and qualitative evidence, such as information from company disclosures and relevant, credible references.

Needed: Detailed guidance and outline.