Pat is preparing a valuation of Global Services Corp. using a multiple-stage FCFE valuation model with the following estimates.The FCFE per share for the current year is $1.75. The FCFE is expected to grow at 15 percent for the next four years, then at 9 percent annually for the following three years, and finally at a constant growth rate of 5 percent starting the eighth year. Global Services' estimated beta is 1.25, and Troy believes that the current market conditions dictate a 2.05% risk free rate and a 10% expected market return.

The following are five independent questions.

a)Given Troy's assumptions and approach, estimate the value of a share of Global Services.

b)If the terminal growth rate is projected to be 6%, rather than 5%, re-estimate the value of a share of Global Services. Does this new estimate make sense?

c)If the expected market return is assumed to be 9%, rather than 10%, re-estimate the value of a share of Global Services. Does this new estimate make sense?

d)If the systematic risk coefficient (beta) of the stock increases from 1.25 to 1.40, re-estimate the value of a share of Global Services. Does this new estimate make sense?

e)If Global Services' estimated beta is statistically insignificant, suggest an alternative approach to arrive at the required rate of return (k) on the stock and use this new k to re-estimate the value of a share of Global Services.Assume Global Services' bonds outstanding are traded at a yield of 6.15% and the risk premium required for Global Services' equity shareholders over bond holders is 4.5%.

Note: Please show how you arrived to the answer through excel, with the formula please :). Thank you for taking the time to answer this question.