4. Answer all parts a. Discuss the drivers of residual earnings. From the perspective of shareholders, why do you agree (or disagree) that the residual earnings (RE) is a more accurate measure compared to the conventional earnings (ROCE)? (10 marks) b. Critically explain when the residual earnings valuation model is the most appropriate approach to use vis--vis the dividend discount model or the discounted cash flow model (10 marks) c. The following provides Orange's earnings per share (EPS) and dividends per share (DPS) for the years 2017 - 2021. Suppose these numbers were given to you at the end of 2016, as forecasts, when the book value per share (BPS) was 8.30 2017E 2018E 2019E 2020E 2021E 3.40 3.50 3.10 3.583.82 1.34 1.42 1.35 1.23 1.45 EPS DPS Use a required return of 10 percent for calculations below: i. Using the residual earnings valuation model, value the firm at the end of 2016. Would you call this a Case 1, 2 or 3 valuation? (20 marks) li. Based on your analysis, provide a recommendation to a potential investor if the share price of the company is traded at 35 per share. (5 marks) ii. Based on your analysis, forecast the target price at the end of 2021