Recalculate the intrinsic value of Honda using the three-stage growth model of Spreadsheet 13.1 (available at www.mhhe.com/bkm; link to Chapter 13 material). Treat each of the following scenarios independently.
a. ROE in the constant-growth period will be 10%.
b. Honda’s actual beta is 1.15.
c. The market risk premium is 8.5%.
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