Suppose the company's ROE is 9% (not 10%) but other inputs do not change. Estimate this company's equity value using the one-stage FCFE model.

n Data on Singapore Airlines (May 2001) Net Income=$ 1,164 Million E Cap Ex = $1520; Depreciation = $1205; RAWC = $303; R Book debt to capital = 5.44%; E ROE = 0.10; Beta = 0.83 n Data on Singapore market variables: 10-yr government bond yield = 6% a market risk premium = 5% Estimate the cost of equity using the CAPM: Ok = 6% + 0.83 * 5% = 10.15%