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Tlease see excel data file to assignment 3 . The file includes financial information for Best Buy. Tasks: 1. Using the residual income model, prepare

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Tlease see excel data file to assignment 3 . The file includes financial information for Best Buy. Tasks: 1. Using the residual income model, prepare a valuation of the common stock of Best Buy as of Year 2 under the following assumptions (use Exhibit 9.6 in the textbook as an example): a. Forecast horizon of five years (years 37 ) b. Sales growth consistent with Year 2 over the forecast period and 3.5% thereafter (terminal year). c. All financial ratios remain at Year 2 levels. In other words, you create a model as show in Exhibit 9.6. You can download the "Residual Income Computation Exhibit 9.6" spreadsheet that is posted in module 12 and update it using the BestBuy data. After you have determined the values for year 2 , you use the same financial ratios for the forecast horizon. d. Cost of equity capital is 12.5%. All tasks should be answered using excel. You should copy and paste financial information into the template file to be able to link cells to the financial 2. Copy and paste your original model (from task 1 ) into a separate tab in the same excel file and run the following sensitivity analysis: Growth rate equals 10% during the forecast horizon and remains at 3% thereafter. Explain your findings with respect to the new share price. 3. Copy and paste your original model (from task 1) into a separate tab in the same excel file and run the following sensitivity analysis: Cost of equity increases to 15%. Explain you findings with respect to the new share price. Tlease see excel data file to assignment 3 . The file includes financial information for Best Buy. Tasks: 1. Using the residual income model, prepare a valuation of the common stock of Best Buy as of Year 2 under the following assumptions (use Exhibit 9.6 in the textbook as an example): a. Forecast horizon of five years (years 37 ) b. Sales growth consistent with Year 2 over the forecast period and 3.5% thereafter (terminal year). c. All financial ratios remain at Year 2 levels. In other words, you create a model as show in Exhibit 9.6. You can download the "Residual Income Computation Exhibit 9.6" spreadsheet that is posted in module 12 and update it using the BestBuy data. After you have determined the values for year 2 , you use the same financial ratios for the forecast horizon. d. Cost of equity capital is 12.5%. All tasks should be answered using excel. You should copy and paste financial information into the template file to be able to link cells to the financial 2. Copy and paste your original model (from task 1 ) into a separate tab in the same excel file and run the following sensitivity analysis: Growth rate equals 10% during the forecast horizon and remains at 3% thereafter. Explain your findings with respect to the new share price. 3. Copy and paste your original model (from task 1) into a separate tab in the same excel file and run the following sensitivity analysis: Cost of equity increases to 15%. Explain you findings with respect to the new share price

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