I attached the calculations for Benton Inc.

The following information was compiled relative to two companies and their common stock at December 31, 2020: All values in millions except per share data and's Anders Corp. Benton Inc. Current stock price $15.00 $30.00 0.8 Beta 1.1 Dividend yield 1.80% 2.50% Fiscal Year 2020: Net sales $22.000 Interest expense 0.400 $180.000 12.000 23.077 Income before taxes 2.250 Income tax expense 1.200 8.077 Net income $1.350 $15.000 Earnings per share $0.675 $1.875 8.000 Shares 2.000 Operating cash flows $22.500 Capital expenditures Net borrowings $1.620 (0.320) (0.410) (9.000) (5.630) = Total assets 40.00 320.00 Total equity 12.00 144.00 The risk-free rate is 3.6% and the expected return on the market is 9.6% BRIDGEWATER STATE UNIVERSITY ACFI 490 Investments Take-Home Problem Set 2 Summer 2021 Page 7 of 14 1. Calculate the following amounts based on the values based on the 2020 results. (12 points) Anders Corp. Benton Inc. CAPM required rate of return (K) K = 10.2 k=8.4 Dividend per share (D) $0.27 $0.75 0.4 0.4 Dividend payout ratio Earnings retention rate (b) 0.60 0.60 Return on equity (ROE) 11.25% 10.42% Sustainable growth rate (9) 6.75% 6.252% Supporting Calculations Required: 3. The following assumptions apply to the Benton Inc. stock: Benton Inc. expects to grow at its currently indicated sustainable growth rate for the foreseeable future. The company's board of directors has indicated that it plans to grow dividends at the growth rate experienced in the overall business. a. Use the 2020 values of the items that you computed above for Benton as the basis to project their 2021 amounts. (5 points) Benton Inc. Actual 2020 2021 Earnings per share Dividends per share Reinvested earnings per share Book value per share Return on equity (ROE) Supporting Calculations Required: b. Use the appropriate dividend discount model to compute the intrinsic value of the Benton Inc. stock at December 31, 2020 and indicate whether the stock is properly valued at its current price. Intrinsic Value of Benton Inc.'s stock (6 points) Supporting Calculation Required: Is the Benton Inc. stock overvalued or undervalued at December 31, 2020? (2 points) Brief Explanation Required: Use the discounted cash flow formula to calculate the rate of return implied by the current market price of the Benton Inc. stock. Implied Rate or Return of Benton Inc. stock (4 points) Supporting Calculation Required: =