18. Use the three-stage dividend discount model to compute the value of Coca-Cola. (Use illustration 13.8 to help you) (20 points) In 2019, the company reported earnings per share of $3.56 and paid out $1.88 per share in dividends. To estimate the expected growth rate for the next 5 years, we assume that the firm would be able to gen erate 20% as a return on equity on future investments and that the firm would reinvest 40% of its earnin 9. 18a) Calculate the growth rate of earnings per share over the next 5 years. 18b) Calculate the payout ratio 18c) Calculate the present value of dividends per share for the next 5 years. The cost of equity is 9% fort he next 5 years. After year 5, we allow for a transition period of 5 more years to stable growth after year 10. In the stable growth phase, we assume the following changes: Expected growth rate of 4% forever A return of equity of 16% A cost of equity of 10% 18d) What is the stable payout ratio? 18e) Compute the present value of dividends per share for years 6 to 10. 18f) Compute the present value of terminal value. 189) Compute the value per share for Coco-cola company. (c+e+f) 19. Use the two-stage FCFE model to compute the value of Nestle (Illustration 14.4) (20 points) All of the inputs will be the same as in the illustration except: Current net income is Sfr 6,200 million, the firm will raise 40% of its reinvestment needs from debt, and in stable growth we assume a growth rate of 2% and ROE is 14%. 19a) Compute the present value of the first stage. 19b) Compute the present value of the terminal value. 190) Compute the value of Nestle per share. 20. Valuing a firm with stable growth FCFF (Illustration 15.1) (10 points) All of the inputs are the same except: capital expenditure = 1,500 million BR, Operating income 4,000 m illion BR, effective tax rate 34% Compute the value of equity