Recalculate the intrinsic value of Honda shares using the free cash flow model of Spreadsheet 13.2 (available at www.mhhe.com/bkm; link to Chapter 13 material). Treat each scenario independently.
a. Honda’s P/E ratio starting in 2012 will be 12.5.
b. Honda’s unlevered beta is .9.
c. The market risk premium is 8.5%.
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