Question 3 Company 3's shares are traded on the London Stock Exchange. It is now 1 January 2023, and the company has just paid a dividend of 0.45 for 2022 . The recent dividend has been Company 3 has also in issue loan notes which will be redeemed in 7 years' time at the face value of 100. It pays a coupon interest of 6%. The company has a cost of equity of 10% and a before-tax cost of debt of 4%. It pays taxes at 25%. Required (a) Using the Dividend Growth Model, estimate the share price for Company 3. (5 marks) (b) What is the value of each 100 loan note? (8 marks) (c) Suppose you have noted that the most recent share price of Company 3 does not agree with the estimation in (a). Explain what may have accounted for that discrepancy. (6 marks) (d) Suppose Company 3 normally pays out 50% of earnings as dividend. Explain how you would use a PE ratio to determine the company's share price. (6 marks) Total 25 marks