Tutorial question 1

The following information is available for a company, Hawken Ltd. Beta : 0.8 Market Risk Premium [MRPl = 8% Risk free rate : 36% Terminal growth rate (3') = 5% After tax cost of debt = 5% Corporate tax rate = 30% Common stockholders' equity (CSE) at the beginning ofFY2023 = $ 90m Net nancial obligation (NFC) at the beginning of FY2023 = $ 100m Stock price at the beginning ofFY2023 = S40 Number of shares outstanding: 10m You have also obtained the following analyst consensus forecasts tin cents} for dividends and earnings for Hawken Ltd. FY2023 FY2024 DPS 110 121 EPS 220 241 Assuming the company will achieve the steady state after FY2024, answer the following questions. Round-off your answers up to one place of decimal (For example, 1.56 should be rounded off as 1.6;].55 should be rounded off as 1.6; 1.54 should be rounded off as 1.5; 10% should be written as 10). Do not use dollar sign {$), comma (,), or percentage (%) in your answers. A. What is the cost of equity for Hawken Ltd from CAPM'? I B. What is the weighted average cost of capital (WACC) for Hawken Ltd? I C. What is the terminal value (in cents) of Hawken Ltd from the Dividend Discount Model (DDM)? I D. What is the present value (in cents) of terminal value of Hawken Ltd from the Dividend Discount Model (DDM)? I E. What is the value per share (in dollars) of Hawken Ltd at the beginning of FY2023 from the Dividend Discount Model (DDM)? I F. What is the terminal value (in cents) of Hawken Ltd from the Residual Income Model (RIM)? I G. What is the present value (in cents) of terminal value of Hawken Ltd from the Residual Income Model (RIM)? I H. What is the value per share (in dollars) ofHawken Ltd at the beginning ofFY2023 from the Residual Income Model (RIM)