valuation estimates for the firm. Assume the values prov that the firm's equity beta is 1.40, the risk-free rate is 2 7 percent ided are from year-end 2015. Also assume 75 percent, and the market risk premium is Dividends per share Return on equity Book value per share s 2.04 9.50% $17.05 Earnings Cash Flow Sales 2015 value per share Average price multiple Forecasted growth rate $5.00 13.10 13.48% $6.60 $25.65 2.36 7.34% 9.42 11.41% 27) Constant Perpetual Growth Model (L.O1, CFA6) What are the sustainable growth rate and required return for Beagle Beauties? Using these values, estimate the current share price of Beagle Beauties stock according to the constant dividend growth model. 28Price Ratios (L04, CFA 8) Using the P/E, P/CF, and PS ratios estimate the 2016 share price for Beagle Beauties. 29, Residual Income Model (L.O3, CFA9) Assume the sustainable growth rate and required 30. Clean Surplus Dividend (Lo3, CFA9) Use the information from Problem 29 and 31. Stock Valuation (1.O1, LO3, LO4) Given your answers in Problems 27-30, do you feel return you calculated in Problem 27 are valid. Use the clean surpl share price for Beagle Beauties with the residual income model. us relationship to calculate the galculate the stock price with the clean surplus dividend. Do you get the same stock price as in Problem 29? Why or why not? eagle Beauties is overvalued or undervalued at its current price of around $82? At what price do you feel the stock should sell? through a period of nonconstant growth for T periods, followed by constant growth forever, the residual income model can be modified as follows: 2. Residual Income Model and Nonconstant Growth (LO3, CFA9) When a stock is going where EPS,(1 +g) -B,xk P, B,+