Venus Company Withers has assembled the data on Venus Company in Exhibit 2. After analyzing competitive pressures and financial conditions in the industry, she predicts that Venus Company will lose market share because of new entrants, but will stabilize within a few years. The required rate of return for Venus Company is 8%. Beginning with a per share dividend of USD 3.15 in 2017, she develops two scenarios regarding the growth of dividends of Venus Company. The scenarios are in Exhibit 2 and are summarized as follows: In Scenario 1, the growth rate will fall in a linear manner over the years 2018 through 2021 from 8% to 4%. Using the H- model, she calculates a value of USD 58.79 per share of Venus Company stock. In Scenario 2, the growth rate falls from 8% in 2017 to 6% in 2018 and 2019, to 5% in 2020 and 2021, and then to a sustainable rate of 3% for 2022 and beyond. Exhibit 2 Venus Company Dividend Growth Scenarios Scenarios Time Period Rate Scenario 1 2018 through 2021 Declining linearly to 4% Beginning 2022 Remaining stable at 4% Scenario 2 2018 and 2019 6% 2020 and 2021 5% Beginning 2022 Remaining stable at 3% Wakuni Corporation Withers evaluates Wakuni Corporation and uses recent financial data from Exhibit 3 to calculate a sustainable growth based on the DuPont model. In addition to this estimate, she performs a sensitivity analysis on the sustainable growth rate whereby the dividend payout ranges from 0% to 10% and the return on equity ranges from 8% to 12%. Exhibit 3 Selected Data for Wakuni Corporation (JPY billions) Net income 43,923 Sales 423,474 Total assets, average during year 486,203 Shareholders equity, beginning of year 397,925 Dividends paid 1,518