Company B: B is an unquoted shoe manufacturer. It has also suffered in the recent recession but the directors are confident that the company is past the worst and growth lies ahead:

- Earnings are expected to be 12.5 million next year and expected to grow at 2% p.a.

- Dividends will be 5 million for each of the next three years and then expected to grow at 3% thereafter.

Daniels has located a similar listed company that has an earnings yield of 12% and a cost of equity of 14%.

Calculate the value of Company B using the dividend valuation model:

Select one:

a. 42.3 m

b. 43.2 m

c. 46.8 m

d. 47.3 m