1. You have been provided the following actual financial information from the reformulated financial statements of Quesnel Ltd. for the year 2020, and then a set of forecasted financial information for the three-year period, 2021 2023.

   2020 A 2021 E 2022 E 2023 E

   Sales $500,000 $525,000 $540,000 $550,000

   Operating Profit Margin (after tax) 9% 9% 9% 9%

   Financial Leverage 1.126 1.111 1.077 1.064

   Net Financial Obligations (NFO) $80,000 $85,000 $87,500 $90,000

   In conjunction, you have also been provided with the following additional information:

   • the forecasted growth rate in comprehensive income after tax (CI) after 2023 is 4%
   • Quesnels cost of equity capital is 8%
   • Quesnels net borrowing cost (NBC) after tax is 4%
   • Quesnel has no Other Comprehensive Income (OCI) items to report during any years
   • Quesnel has 100,000 common shares outstanding

   Using the Abnormal Earnings (Residual Income) valuation model, what is the intrinsic value of a common share of Quesnel Ltd. based on the forecasts and additional information presented above?

   	1.	$10.55
   	2.	$9.84
   	3.	$5.78
   	4.	$12.12