B C D H I J F G Div growth Term value Year 2017 E Dividend 1.04 1.23 Investor CF 1.04 1.1 0.08 2018 1.23 A 1 Inputs for GE 2 beta 3 mkt_prem 4 rf 5 k_equity 6 term_gwth 7 2019 1.41 1.41 0.025 0.1130 2020 1.60 0.060 2021 1.60 1.85 2.11 0.1544 1.85 2022 0.1450 2.11 8 2023 2.40 0.1355 2.40 9 2024 2.70 2.70 10 2025 3.02 11 2026 3.34 0.1261 0.1166 0.1 0.0978 0.0883 2027 3.67 3.02 3.34 3.67 3.99 4.31 2028 12 Value line 13 forecasts of 14 annual dividends 15 3.99 2029 4.31 2030 0.0789 0.0694 0.0600 0.0600 4.61 4.89 5.18 2031 4.61 4.89 108.75 2032 103.57 16 17 Transitional period 18 with slowing dividend 19 growth 20 Beginning of constant 21 growth period 22 35.70 = PV of CF E17 * (1+ F17)/(B5 - F17) NPV(B5,H2:H17) 23 24 Problem 18-15 Calculate the intrinsic value of GE in each of the following scenarios by using the three- stage growth model of Spreadsheet 18.1. Treat each scenario independently. a. The terminal growth rate will be 10.00%. (Round your answer to 2 decimal places.) Answer is complete and correct. Intrinsic value $ 118.28 b. GE's actual beta is 1.02. (Round your answer to 2 decimal places.) Answer is complete and correct. Intrinsic value $ 41.18 c. The market risk premium is 10.10%. (Round your answer to 2 decimal places.) Answer is complete but not entirely correct. Intrinsic value $ 12.79 X