b. What fundamental valuation would you apply to the firm according to the RIM model for common equity? You believe that growth rates of 12%, 10% and 8% in years 1-3. respectively, is appropriate. The beta is 1.6, with an assumed nisk-free rate of 2% and market (isk premium of 8.5%. This will be followed by a rerminal growth rate of 1.5% (10 pts) a. Consider the financial statements for Firm DEF attached. In addition to that information, you also know that the firm has 10,000 shares outstanding. What fundamental valuation would you apply to a share of common stock according to the FCF model for common equity? You believe that growth at the sustainable growth rate for the first three years is appropriate, followed by aterminal growth rate of 1.5%. You may use the traditional levered beta in your estimate of cost of equity. This value is curently 1.6. You assume the risk-free rate of 2% and a market tisk premium of 8.5%. The cost of debt is 4.5% and the firm expects to maintain the 21% tax rate. The WACC is 11.83%. (10 pts) b. What fundamental valuation would you apply to the firm according to the RIM model for common equity? You believe that growth rates of 12%, 10% and 8% in years 1-3. respectively, is appropriate. The beta is 1.6, with an assumed nisk-free rate of 2% and market (isk premium of 8.5%. This will be followed by a rerminal growth rate of 1.5% (10 pts) a. Consider the financial statements for Firm DEF attached. In addition to that information, you also know that the firm has 10,000 shares outstanding. What fundamental valuation would you apply to a share of common stock according to the FCF model for common equity? You believe that growth at the sustainable growth rate for the first three years is appropriate, followed by aterminal growth rate of 1.5%. You may use the traditional levered beta in your estimate of cost of equity. This value is curently 1.6. You assume the risk-free rate of 2% and a market tisk premium of 8.5%. The cost of debt is 4.5% and the firm expects to maintain the 21% tax rate. The WACC is 11.83%. (10 pts)