Question Two Answer all parts Show all your workings (a) Southern Manufacturing (SM) recently reported the following year-end 2021 results (in millions): Net Income Dividends 14,000 6,125 Book Value of Equity 93,000 Shares Outstanding 5,600 The following information for 2021 and each of the last three years is also available (in millions): Net Income 2018 2019 2020 2021 11,614 12,717 12,844 Dividends Buybacks Net Long Term Debt Issued 4,875 5,725 6,035 1,979 2,056 2,355 185 1,560 55 -156 25 SM is expecting its current rate of growth to continue for the next seven years before declining to stable growth of 3.5% per annum. SM's beta is expected to be stable at 1.20 throughout. The risk free rate and the market risk premium are expected to be 2.0% and 5.0%, respectively. (i) Calculate SM's modified payout ratio. (5 marks) (ii) Using your answer to part (i), above, estimate SM's share price using the dividend discount method. State any assumptions. (20 marks)