Duma Co, listed company, wants to estimate the value of its shares, using its future fee cashflows, and compare this to is current quoted share price of $3-30 per share. The company has 100 milion shares in issue. It estimates ‘that ts profits will cow annually for the net four years and then remain stable atthe 2013 amount forthe foreseeable future Duma Co's most recent net profit for the year to 30 November 2009 is $23:Om, which was calculated after taking Into account depreciation and provisions of $2-2m and finance costs (Interest payable) of $1-1m, on non-cutrent liabilities totalling $110m. It is expected that future net profits will be as follows: Year to 30 November 2010 ©2011-2012, 2013 $m ‘sm sm ‘$m 26 331 297 arr Itis estimated that depreciation and provisions will increase by $0-5m per year until 2013 and then remain constant, ‘out the finance costs will not change in the future. Historically, Duma Co has found that its net profit margin has been ‘around 22% of sales revenue and itis expected that this will not change significantly in the future. Duma Co has found that it would need to invest $0-10 in adidltional working capital and $0-08 in additional ‘non-current assets for every $1 Increase in sales revenue, You can assume a cost of capital of 10%. Ignore taxation and show workings in $milions ($m) to one decimal place. Required: (a) Based on the information provided above, estimate the value of Duma Co's share, clearly explaining any ‘assumptions made. (20 matks) (b) With reference to the efficient market hypothesis and the information provided above, discuss possible reasons for the ditference in the actual share price of $3-30/share and your estimated value in part (a) above. (20 marks) (20 marks)