Bonus Homework on Residual Income Model Assume that the COS and Occupancy Costs as a percentage of total revenues increases by 0.2% every year from 2019 to 2023 for Starbucks. The table below shows the updated net income and stockholders' equity in each year over the five years. Please use a simple calculator to complete the following requirement. Please do not use excel as you cannot access excel in the final. 1. Assume that the cost of capital for Starbucks is 5%. How much are the normal and abnormal earnings for each of the next five years? How much is the present value of the abnormal earnings for each of the next five years? 2019 2020 2021 2022 2023 Beginning BV 1.170 172 918 1.711 2.551 2.947 3,181 3.238 3,314 3,384 + net income - Dividends and stock repurchase 3,945 2,415 2.444 I 2.474 2.502 Ending BV 172 9181 .711 2551 3.434 Normal earnings Abnormal earnings 0.9524 0.9070 0.8638 0.8227 0.7835 Present value factor Present value of abnormal earnings 2. Assume that the abnormal earnings will grow 3% each year after 2023. How much is the present value of the terminal value? 3. How much is the estimated value of Starbucks? 4. Is this estimated value greater or less than the value we estimated under the assumption that COS and Occupancy Costs as a percentage of total revenues do not change from 2019 to 2023? Why