QUESTION $5(10$ marks$)$Kaizer Ltd is a soccer sports equipment manufacturer that is looking to expand its operationsinto manufacturing rugby sports equipment. Kaizer Ltd has identified Lions $($Pty$)$ Ltd$,$ an unlistedcompany that is a pillow and linen manufacturer, that it would like to acquire as a going concern.Lions $($Pty$)$ Ltd has forecast operating profits of R$6$ million for the next financial year.Lions $($Pty$)$ Ltd is funded partly by equity $(5$ million R$1$ shares in issue$)$ and partly by debt$($R$2$ million of bank borrowings with a fixed interest rate of $10\%).$ The rate of corporate incometax is $27\%.$The average PE ratio for stock market companies is $9,$ or $11$ for those companies in a similarline of business to Lions $($Pty$)$ Ltd$.$Lions $($Pty$)$ Ltd is a capital$-$intensive business with no intangible assets. With the number andvalue of assets that Lions $($Pty$)$ Ltd owns, the directors have the assets valued by qualified andtrustworthy valuers on an annual basis, whereafter the value of the assets is adjusted. Thevalue of the assets of the company, after deducting liabilities amounting to R$7$ million, isR$42$ million.Lions $($Pty$)$ Ltd has just paid an ordinary dividend of $40\mathrm{.}0$ cents per share and is expected to paya dividend of $45\mathrm{.}2$ cents per share in one years time. This dividend growth is expected toremain constant in future years. The company has a cost of equity of $18\%.$Required:$5\mathrm{.}1$ Use the following valuation methods to calculate a range of company values andshare prices for Lions $($Pty$)$ Ltd:$($a$)$ Dividend Valuation Model $($DVM$)$; $(3$ marks$)($b$)$ P$/$E valuation;Comment on the information and amounts used in the calculation of theP$/$E valuation. $(5$ marks$)($c$)$ Net assets valuation;Briefly discuss the asset$-$based valuation method and the validity thereof invaluing Lions $($Pty$)$ Ltd$.(2$ marks$)$Show all calculations $[$Question total: $10$ marks$][$CIMA adapted$]$