Use the following data to calculate your stock value.

Note the following:

ROE = NI / Total equity

Payout ratio = total cash dividends / NI

Recent total dividend payments were $55Million

There are 10million shares outstanding.

T-bill rate is 3.0%, S&P500 mkt return was 10.00%, and beta of this company is 1.5.

equity beta of this company is 1.5.

Net Capital Spending (NCS) = change in Fixed assets + depreciation

Change in Net working Capital = (CA CL ) _end (CA CL ) _beg

FCF (Free cash flow) = EBIT * (1-tax rate) + Depreciation NCS change in NWC

assume that the market value of debt is equal to the book value of debt.

Balance sheet (in millions) of 2020 and 2021
	2020		2021			2020		2021
Current Assets	380		450		Current liabilities	150		200
Fixed Asset	600		500		Fixed Debt	380		250
					Total equity	450		500
Total Asset	980		950		Total liabilities+equity	980		950

Income Statement (in millions) of 2021
Revenue	500
all expenses	-200
EBIT	300
Interest expense	-100
EBT	200
Tax	-90
NI =	110

YEAR	DIVIDEND per share
2015	$4.50
2016	$4.90
2017	$5.00
2018	$5.10
2019	$5.20
2021	$5.50

FOR QUESTIONS #1 - #3, You assume a constant perpetual growth model is appropriate for your stock valuation.

Question #1. Using the sustainable growth rate to estimate the growth rate, what should be the stock value per share?

Question #2. Using the arithmetic average growth rate to estimate the growth rate, what should be the stock value per share?

Question #3. Using the geometric average growth rate to estimate the growth rate, what should be the stock value per share?

*try not to round your interim calculations. If you have to round it, use at least 6 decimals for accurate final value.

Question #4. Now, you believe a two-stage growth dividend discount model is appropriate for your stock valuation. You believe you should use the sustainable growth rate for the next 3 years and then you believe it will drop to a constant growth rate of geometric average growth rate per year indefinitely. What should be the stock value per share?

Question #5. You believe your prior calculation with two stage growth rates are not accurate to reflect the true value of the stock. You decide to apply the H-model to reflect gradual decline between the two growth rates from Question #5. With this new adjustment, what should be the stock value per share?

For Questions #6- #7. Assume this company does not pay any dividend.

And further assume that the Free cash flow and the earnings will grow at the constant rate of 4.5%.

With this new assumption,

Question #6. What should be the stock value per share using the Residual Income Model (RIM)?

Question #7. What should be the stock value per share using the Free Cash Flow (FCF) model?