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d) Kosciuszko's financial year runs to the end of April. It's cost of equity capital is 7.5%. Common shareholder equity at 30 April 2021 was
d) Kosciuszko's financial year runs to the end of April. It's cost of equity capital is 7.5%. Common shareholder equity at 30 April 2021 was equal to AUD 200 million. The explicit forecasting period ends in April 2025 and abnormal earnings are expected to decline by 8% per annum thereafter. Abnormal earnings in the year to April 2025 are expected to equal AUD 44 million and the present value of abnormal earnings for the whole of the explicit forecasting period is expected to equal AUD 164 million. (1) Calculate the predicted abnormal earnings in the year to April 2029, to the nearest AUD 100,000 (2 marks) (ii) Determine the intrinsic value of Kosciuszko's equity, to the hearest AUD million
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