Task 7: Estimate the sustainable growth rate as at the end of the fourth year, based on the following assumptions: The sustainable Profit Margin is estimated to be equal to that estimated for the fourth year, based on the fourth year Net Income and Sales. The sustainable Asset Turnover is estimated to be equal to that estimated for the fourth year, based on average Total Assets in year 3 and 4 and Sales in year 4. Assume a target Leverage Ratio as being equal to 120%. Assume a target Retention Ratio as being equal to 40%.

Task 8: Estimate the required return based on CAPM, based on the following assumptions: Assume the Risk Free Rate equals 1.5% Assume Beta equals 2.0 Assume a Market Risk Premium of 6.0%

Task 9: Estimate the Terminal Value of the new venture as at the end of the fourth year, based on the following assumptions: Equity Valuation Cash Flow = Net Income + Depreciation Change in Net Operating Working Capital (exclude surplus cash) Change in Gross Fixed Assets + Net Debt Issues Assume the Equity Valuation Cash Flow grows at the sustainable growth rate estimated in Task 7 from year 5 onwards. Use the required return estimate from Task 8