(10-9) (10-14) YR

4
= 4%
100
2.43
4 0.15-0.08
= 3.33%
120

(10-15)
a.
(10-12) 1
a.
1 1.9
= 9.5
0.15+0.05 2

2 2
= 13.33 ∑_𝑛=1^4▒𝐹𝐶𝐹/
0.15 (1+0.13)^𝑛

3 2.1 3
= 21
0.15-0.05

4 2.2
= 44
0.15-0.1

b. 1 2(1+0.15)
= 0
0.15-0.15
These are unreasonable results since the result
values of 0 and ngetaive even it has high grow
2 2(1+0.2)
= -48
0.15-0.2

c
To think that a firm has higher growth rate than its expected return is illogical and unrea
 1 2 3 4 5 6
1 1 1 1.5 2.25 2.43

= 34.71

42.8
= 713.33
0.13-0.07

-20 30 40
= -17.7 = 23.49 = 27.72
(1+.13)1 (1+.13)2 (1+.13)3

∑_𝑛=1^4▒𝐹𝐶𝐹/
(1+0.13)^𝑛 Market
= 471.01
Value

471.01-100 = 371.01

371.01 Price per

= 37.101
Share
10

ble results since the results give the

taive even it has high growth rate

7rttttttty

turn is illogical and unreasonable

 713.33
= 437.5
(1+.13)4