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Source 1: Coles Limited (COL) Annual Report 2022 https://www.colesgroup.com.au/FormBuilder/_Resource/_module/ir5sKeTxxEOndzdh00hWJw/fil e/Annual_Report.pdf Source 2: Yahoo Finance https://au.finance.yahoo.com/quote/COL.AX/ d) You are trying to value COL shares today (end

Source 1: Coles Limited (COL) Annual Report 2022 https://www.colesgroup.com.au/FormBuilder/_Resource/_module/ir5sKeTxxEOndzdh00hWJw/fil e/Annual_Report.pdf Source 2: Yahoo Finance https://au.finance.yahoo.com/quote/COL.AX/ d) You are trying to value COL shares today (end of 2022). Assume the current price of COL shares is $16.69. Assume that the total dividend paid by COL in 2022 was a lump sum. You also estimate that for the next two years dividends will grow respectively at 15% and 10% per year. After this (starting in time 3) you estimate dividends will grow at a constant rate of 4% forever. Assume that today the Australian 10 year government bond has a yield of 3.6%, the market risk premium is 6.5% and the beta of COL is 0.6. (The yahoo finance page says the beta is 0.20, but lets use 0.6.) Based on this price would you purchase COL shares? Why or why not? e) What was the market capitalization of COL on 31 December 2022, assuming that the total number of shares outstanding on this day is the same as that reported in the annual report? (Use the closing price on that day). f) What source of funding (non-current) is COL primarily using to finance its operations? What are the advantages and disadvantages of this source of financing? g) Consider the COL bond issue with a coupon rate of 2.65% and a 10 year original maturity. Assume the bonds are semiannual with payment dates of 6 May and 6 November of every year, the bonds have a face value of $10,000 and the required rate of return for similar bonds in the market is 4.87%. Calculate the market price of these bonds today (end of 2022). (You may like to visit: https://xtbs.com.au/xtbs-profile/ytmcol/)

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