Question: Two-Stage Growth Valuation (Medium) An analyst develops the following pro fonna at the end of2012 for a firm that uses a 9 percent hurdle rate for its operations (in millions):
![267_2012A.png](https://secure.tutorsglobe.com/CMSImages/267_2012A.png)
a. Forecast the cum-dividend operating income growth rate for 2014.
b. Using the two-stage growth model 15.5, value the equity with a long-tenn growth rate of 4 percent.
c. What is the forward enterprise price/earnings ratio implied by the valuation?