Please answer both parts.

Question 2 i) Applnc is currently selling at $45, with trailing 12-months earnings and dividends of $1.76 and $0.84 respectively. The return on equity is 27% and the profit margin on sales 10.3%. The firm also reports P/E 20.3, P/B 6.1 and P/S 2.1. The risk-free rate is 5.0%, the equity risk premium is 5.5% and the firm's beta is 0.76. Assuming that growth rate is 7%, which of the reported multiples (P/E, P/B, P/S) would be justified? Explain your workings and comment on the value of the firm. (10 marks) ii) Any absolute equity valuation model can be used if a company does not pay dividends. Is this true or false? Discuss. (10 marks) Question 2 i) Applnc is currently selling at $45, with trailing 12-months earnings and dividends of $1.76 and $0.84 respectively. The return on equity is 27% and the profit margin on sales 10.3%. The firm also reports P/E 20.3, P/B 6.1 and P/S 2.1. The risk-free rate is 5.0%, the equity risk premium is 5.5% and the firm's beta is 0.76. Assuming that growth rate is 7%, which of the reported multiples (P/E, P/B, P/S) would be justified? Explain your workings and comment on the value of the firm. (10 marks) ii) Any absolute equity valuation model can be used if a company does not pay dividends. Is this true or false? Discuss. (10 marks)