1.5 Nods Ltd wishes to ascertain the value of its equity. The following schedule of forecast posttax cash flows after financing charges of Nods Ltd was obtained: Posttax cash flows after financing charges (forecast):

Year 1 32 million

Year 2 34 million

Year 3 37 milluon

The forecast cash flows are expected to grow at a rate of 7% per annum after year 3 into perpetuity. The company has a cost of equity of 16% and a WACC of 12%.

Rounding used to obtain answers below:

3 decimal places for the discount factor (per the relevant tables);

0 decimal places for other workings and answers;

If a financial calculator is used, answers will differ slightly but will still be close to identify the correct answer.

What is the value of the companys equity?

A R 101 million

B R 109 million

C R 330 million

D R 359 million