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please help me C.relative valuation D A.discounted cash flows 39 I 18.Era (209) We are going to value a power utility company using the sustainable

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C.relative valuation D A.discounted cash flows 39 I 18.Era (209) We are going to value a power utility company using the sustainable growth dividend discount model. We assume the earnings per share the firm reported for 2010 was $3.47 and the dividends per share it paid out for the year was $2.22. We assume the value of beta was 0.80 for this firm and an equity risk premium of 5%. The risk-free rate was 3.5%. Return on equity was 9.79%. The stock was trading at $53.47 a share in May 2011 Questions: What is the retention ratio of this firm? (5 points) What is the sustainable expected growth rate of dividend of this firm? (5 points) What is the cost of equity of this firm? (5 points) What is the value per share of this firm? Was it undervalued in May 2011? (5 points) 6 30 MacBook * F5 REA%5-6

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