'CallmenoviIr is a firm that designs, manufactures and sells mobile phones. The book value of equity for Callmeno'isr on Januaryr l, 2010 is $60,000. The risk free rate is 5% and the equity risk premium is 10%. As an analyst, you are assigned to determine Callnienow's mdaniental value and make investment recommendations. You estimate that the company's beta is 0.4. In addition, you have the following forecasts: December 31 of 2010 201':|r 2010 2019 2020 Net income ________________ $14,000 $13,650 $12,005 $12,501 $13,002 Dividends __________________ $6,000 $7,500 $0,000 $11,500 $11,022 For 2021 and beyond, the residual income (also known as abnormal eamings) is predicted to approximate Year 2020 level forever. {bl You wonder why your intrinsic value estimated from (a) deviates from the current market price. You call up the CEO of Callmenow and he agrees with all your forecasts except the terminal growth rate estimate. He believes that the residual income will grow at the rate of 5% per year from the year ll level for year 2011 and beyond, as a result of the rm's successful REED program. 1What's your new estimate of the firm's equity value