Company	Commonwealth Bank of Australia (CBA)
Share price 30 June 2009	$39.00
Share price 30 June 2010	$48.64
Operating cash flow 2010($m)	3445
Issued shares (million)	1644

1. Assume that the discount rate is 7% and the operating cash flow of CBA remains at the current level for the next 15 years, and then increases by 20% and remains at that level forever. What would be the value of CBAs shares?
2. Assume that the discount rate is 7% and the operating cash flow of CBA grows at 2.5% a year forever. What would be the value of CBAs shares?
3. Using the market capitalization of CBA as at 30 June 2010, what annuity over 30 years is equivalent in value assuming a discount rate of 7%?