Q1. What is the implied Required Return for GlitterSplitter Inc.? (round to the nearest .01% or 0.0001 as decimal) hint: use the CAPM with equity beta Q3. What is the Average Implied Inflation Rate? (round to the nearest one-tenth of a percent or 0.001 as decimal) Open Ended Number 3 Use the following information to answer the three questions below. note: round intermediate values to no fewer than four decimal places Given the following two companies and the common assumptions below: CaffeinatedNation Current Share Price $39.772 Analysts collectively think CaffeinatedNation will be able to grow earnings at 12.000% percent for each of the next five years. They further expect, after Year 5, CaffeinatedNation will grow earnings for the foreseable future at 4.000% per year. At the start of Year 6 , analysts estimate the fair value of the stock will be $30.373 The analysts also calculate CaffeinatedNation's equity beta as 0.80 . \begin{tabular}{|c|c|} \hline Assume the company has & 1,000,000,000 \\ \hline recently paid total dividends o & $1,810,000,000 \\ \hline \end{tabular} GlitterSplitter Inc. Current Share Price $39.852 Analysts reviewed GlitterSplitter's recent financial reports and estimated the following: \begin{tabular}{|l|r|l|} \hline EBIT & 46.50 & \$million \\ \hline Interest Expense & 6.45 & \$million \\ \hline Depreciation & 10.00 & \$million \\ \hline Change in Net Working Capital & 0.00 & \$million \\ \hline Capital Expenditures & 3.00 & \$million \\ \hline Dividends Paid & 0 & \$million \\ \hline Growth rate of FCF & 3.0% & \\ \hline Tax rate & 22.0% & \\ \hline Debt/Equity ratio & 0.4 & \\ \hline Equity Beta & 1.3 & \\ \hline Shares Issued and Outstanding & 10,000,000 & \\ \hline Debt Outstanding & 100,000,000 & \\ \hline & & \\ \hline Common Assumptions: & & \\ \hline Market Risk Premium & 7.00% & \\ \hline Real Risk-Free Rate & 2.00% & \\ \hline \end{tabular} Each company's Current Share Price is exactly the same as the respective current theoretical price