Please I dont need answer in handwriting.

1. Elizabeth Villeneuve is a senior economist at Proplus Financial Economics Consulting (Proplus). She is responsible for the valuation of equity markets in developing countries and is reviewing the preliminary report on Emerge Country prepared by one of her analysts, Danielle Delaroche. Emerge Country is now experiencing stronger economic growth than most developed countries DeLaroche has summarized in Exhibit A some of the assumptions contained in the report. In modeling the growth in the country's real output, she has used the Cobb-Douglas production function under the assumption of constant retu ms to scale and, in valuing the equity market, she has used the standard Gordon growth modd with constant dividend growth rate EXHIBIT A Assumptions for the Equity Index of Emerg Country Annual dividend per share in 2008 Forecasted Forecasted annual growth in TFP Expectad real growth rate of dividends to perpetuity Required real discount rate to pespetuity 450 CU 750 CU 1.5% 5.5% 75% earnings per share in 2009 CU-currency unit of Emerge Country A. Based on the information in Exhibit A, calculate the equiry index price level of Emerge Country implied by the Gordon growth model, as of 31 December 2008. Villeneuve is familiar with the Gordon growth model but not the H-model. B. Identify two variables that are needed in the H-model and not needed in the Gordon growth model As an illustration of a relative value approach that can be used to support tactical asset allocation, DeLaroche has estimated that the forward operating camings yield of the equity index in Emerge Country is 6 percent and that the medium-term government bond yield is 7 percent. She then applies the Fed moddl to the situation in Emerge Country C. Based on the Fed model, determine whether the equity market is undervalued or overvalued and identify three criticisms of the Fed model. Because most of Proplus's dients use strategies that require fundamen tal security analysis, Proplus uses both top-down and bottom-up approaches in all reports dealing with equity retum D. Contrast the two forecasting approaches used by DeLaroche as they relate to industry analysis