Calculate the intrinsic value of Rio Tinto in each of the following scenarios by using the three-stage growth model of Spreadsheet 18.1. Treat each scenario independently.
a. The terminal growth rate will be 6%. (Round your answer to 2 decimal places.)
Intrinsic value:
b. Rio Tinto’s actual beta is 1.2. (Round your answer to 2 decimal places.)
Intrinsic value:
c. The market risk premium is 7.5%. (Round your answer to 2 decimal places.)
Intrinsic value: