Calculate the intrinsic value of Honda using the three stage growth model of Spreadsheet 18.1. Treat each scenario independently.

a.	ROE in the constant-growth period will be 10.8%. (Round your answer to 2 decimal places.)

Price

$

b.	Hondas actual beta is 1.07. (Round your answer to 2 decimal places.)

Price

$

c.	The market risk premium is 10.3%. (Round your answer to 2 decimal places.)

Price

$

Inputs			Year	Dividend	Div growth	Term value	Investor CF
beta	0.95		2012	0.78			0.78
mkt_prem	0.08		2013	0.85			0.85
rf	0.02		2014	0.93			0.93
k_equity	0.0960		2015	1.00			1.00
plowback	0.75		2016	1.09	0.0863		1.09
roe	0.1		2017	1.18	0.0852		1.18
term_gwth	0.075		2018	1.28	0.0841		1.28
			2019	1.38	0.0829		1.38
			2020	1.50	0.0818		1.50
			2021	1.62	0.0807		1.62
Value line			2022	1.75	0.0795		1.75
forecasts of			2023	1.88	0.0784		1.88
annual dividends			2024	2.03	0.0773		2.03
			2025	2.18	0.0761		2.18
			2026	2.35	0.0750		2.35
Transitional period			2027	2.52	0.0750	129.18	131.71
with slowing dividend
growth							40.29	= PV of CF
	Beginning of constant			E17 * (1+ F17)/(B5 - F17)
	growth period						NPV(B5,H2:H17)