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The following information is available for a company, Hawken Ltc. Beta =0.8 Market Risk Premium (MRP)=8% Risk free rate =3.6% Terminal growth rate (g)=5% After
The following information is available for a company, Hawken Ltc. Beta =0.8 Market Risk Premium (MRP)=8% Risk free rate =3.6% Terminal growth rate (g)=5% After tax cost of debt =5% Corporate tax rate =30% Common stockholders' equity (CSE) at the beginning of FY2023=$90m Net financial obligation (NFO) at the beginning of FY2023 =$100m Stock price at the beginning of FY 2023=$40 Number of shares outstanding =10m You have also obtained the following analyst consensus forecasts (in cents) for dividends and earnings for Hawken Ltd. Assuming the company will achieve the steady state after FY2024, answer the following questions. percentage (%) in your answers. A. What is the cost of equity for Hawken Ltd from CAPM? B. What is the weighted average cost of capital (WACC) for Hawken Ltd? C. What is the terminal value (in cents) of Hawken Ltd from the Dividend Discount Model (DDM)? D. What is the present value (in cents) of terminal value of Hawken Ltd from the Dividend Discount Model (DDM)? E. What is the value per share (in dollars) of Hawken Ltd at the beginning of FY2023 from the Dividend Discount Model (DDM)? F. What is the terminal value (in cents) of Hawken Ltd from the Residual Income Model (RIM)? G. What is the present value (in cents) of terminal value of Hawken Ltd from the Residual Income Model (RIM)? H. What is the value per share (in dollars) of Hawken Ltd at the beginning of FY 2023 from the Residual Income Model (RIM)
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