Lazenby plc has been set up to exploit an opportunity to import a new product from overseas. It has issued two million ordinary shares of par value 25p, sold at a 25 per cent premium. Its projected accounts show the following annual operating figures:

Sales revenue Operating costs

(after depreciation of £50,000)

Operating profit Taxation at 30%

Profit after tax

£500,000

(£300,000)

£200,000

(£60,000)

£140,000 Notes:

(i) Shareholders require a return of 10 per cent p.a.

(ii) Replacement investment is financed out of depreciation provisions and is fully tax-allowable.

(iii) 2 per cent of sales should be written off as bad debts.

(iv) Bad debt write-offs are 50 per cent tax-allowable.

Required Value each share in Lazenby:

(a) assuming perpetual life;

(b) over a 10-year horizon.