Following are financial statement information for Westlands Corporation , an NSE listed company:

2017 2018

sales growth 8.5% 10.65%

Net profit margin 6.71% 8.22%

net working capital turnover 8.98 9.33

fixed asset turnover 1.96 1.64

total operation assets/total equity 1.96 2.01

number of shares outstanding 1,737 1,733

sales 25,423 28,131

net income 1,706 2,312

net working capital 2,832 17, 136

fixed assets 15, 232 17,136

total operating assets 18,064 20,156

long term liabilities 8,832 10,132

total shareholders equity 9,232 10,019

using the residual income model, prepare a valuation of the equity of Westlands Corporation as of 2018 under the following assumptions:

i) forecast horizon of five years

ii) Sales growth of 10.65% per year over the forecast horizon and 3.5% thereafter.

iii) all financial ratios remain at year 3 levels

iv) cost of equity is 12.5%