Please refer to the linked file below to complete the following questions.

Use the excel template for the residual earnings model to understand the model

1. Examine the Apple valuation model and compare the valuation to the actual market capitalization on Yahoo finance (Note if there is a difference and explain in a few sentences what the difference could be attributed to).

2. Pick a different public company and acquire their earnings forecast on Yahoo finance

3. Acquire the Balance Sheet (Shareholders' equity) info on Yahoo finance (for the book value of the company)

4. Plugging in the assumptions for cost of equity and perpetual growth into the attached valuation model Perform a valuation of the stock (Adjust the assumptions once again to match the true market capitalization found on Yahoo Finance).

AAPL Residual earnings model 6/14/18 Terminal growth rate Cost of equity Low 3% 096 Mid 4% 10.6% High 5% 13.3% Earnings growth 20.0% Growth scenario Low Cost of equity scenario High 2018 2019 2020 2021 113,507,136,000 67,349,680,000 64,649,628,560 2022 2023 163,450,275,840 617,065,379,200 81,380,580,406 2024 Earnings Shareholders equity Residual earnings 65,687,000,000 128,249,000,000 48,629,883,000 78,824,400,000 193,936,000,000 3,030,912,000 94,589,280,000 272,760,400,000 8,312,146,800 136,208,563,200 480,856,816,000 72,254,606,672 196,140,331,008 780,515,655,040 92,331,748,888 PV of Residual PV Terminal value 279,255,348,250 423,774,068,452 Total value 831,278,416,701 AAPL Residual earnings model 6/14/18 Terminal growth rate Cost of equity Low 3% 096 Mid 4% 10.6% High 5% 13.3% Earnings growth 20.0% Growth scenario Low Cost of equity scenario High 2018 2019 2020 2021 113,507,136,000 67,349,680,000 64,649,628,560 2022 2023 163,450,275,840 617,065,379,200 81,380,580,406 2024 Earnings Shareholders equity Residual earnings 65,687,000,000 128,249,000,000 48,629,883,000 78,824,400,000 193,936,000,000 3,030,912,000 94,589,280,000 272,760,400,000 8,312,146,800 136,208,563,200 480,856,816,000 72,254,606,672 196,140,331,008 780,515,655,040 92,331,748,888 PV of Residual PV Terminal value 279,255,348,250 423,774,068,452 Total value 831,278,416,701