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 9.5%. (Round your answer to 2 decimal places.)

Price

$

b.	Hondas actual beta is 1.05. (Round your answer to 2 decimal places.)

Price

$

c.	The market risk premium is 9%. (Round your answer to 2 decimal places.)

Price

$

Inputs Year Dividend Divgrowth Term value Investor CFI beta 095 2012 078 mkt prem 0.08 2013 0.85 0.85 0.02 2014 0.93 1.00 0.0960 1.00 k equity 2015 plowback 1.09 2016 0.0863 0.0852 2017 roe term gwth 0.075 2018 1.28 0.0841 1.28 2019 1.38 0.0829 1.38 1.50 0.0818 1.50 2020 LA 2021 1.62 0.0807 1.62 175 0.0795 1.25 Value line 2022 188 0.0784 4 1.88 forecasts of 2023 annual dividends 2024 0.0773 2025 2.18 0.0761 2.18 2.385 0.0750 2.35 2026 131.71 0.0750 Transitional period 129.18 with slowing dividend growth 40.29 PV of CF Beginning of constant E17 (1+ F17)/ (B5 F17) growth period NPV(B5,H2:H17 Inputs Year Dividend Divgrowth Term value Investor CFI beta 095 2012 078 mkt prem 0.08 2013 0.85 0.85 0.02 2014 0.93 1.00 0.0960 1.00 k equity 2015 plowback 1.09 2016 0.0863 0.0852 2017 roe term gwth 0.075 2018 1.28 0.0841 1.28 2019 1.38 0.0829 1.38 1.50 0.0818 1.50 2020 LA 2021 1.62 0.0807 1.62 175 0.0795 1.25 Value line 2022 188 0.0784 4 1.88 forecasts of 2023 annual dividends 2024 0.0773 2025 2.18 0.0761 2.18 2.385 0.0750 2.35 2026 131.71 0.0750 Transitional period 129.18 with slowing dividend growth 40.29 PV of CF Beginning of constant E17 (1+ F17)/ (B5 F17) growth period NPV(B5,H2:H17