1. Using PROBLEM 2, what is the projected growth rate for the 10-year period? (Round off to 2 decimal places. Example 12.534% must be written as 12.53)
2. Using PROBLEM 2, If your required return on investment is 12%, how much will be the INTRINSIC Value of U-GANDA Corporation?
3. Using PROBLEM 2, If your required return on investment is 12%, would you purchase the shares of U-GANDA Corporation? Substantiate your answer.
Extracted text: PROBLEM 2 You are evaluating U-GANDA Corporation based on the following projected cash flows for the next 10 years: Cash flows Cash flows 1,000,000 Year Year 1 1,300,000 1,500,000 1,700,000 2 1,000,000 1,150,000 1,200,000 7 3 8 4 9 2,000,000 2,200,000 5 1,200,000 10 After year 10, the cash flows are expected to grow at a rate based on the 10-year period. The company have 1 million outstanding shares and is currently selling on the stock market at P30 per share. The company's outstanding debts amounted to P3,000,000.