Calculate the value of the following firms given the data in Table 2. Table: Information collected on the Four stocks Information SKY CLOUD FCFE Y1 (mln) 25.00 30.00 FCFE Y2 (mln) 30.00 25.00 FCFE Y3 (mln) 35.00 35.00 FCFE Y4 (mln) 45.00 30.00 Sustainable (g) after Y 4 10% 5% The variance of the stock market return 0.80% 0.80% The Covariace of the stock and market returns 1.30% 1.70%

The expected market return is 15%, and the market risk premium is 10%. The following tasks are required:

1 Calculate the expected return for each stock.

2 Calculate the value of each stock using discounted cash flow model.