1. A firm is expected to grow at an annual rate of 13% for the next three years. The growth rate is expected to decrease to 10% for the following two years and to be 4% thereafter forever. The last dividend paid (Do) is $3.00. Dividends are paid at the end of each year. The required rate of return is 14%. Find the intrinsic value of the common share. Drawing a diagram will help you to organize the information. 2. Southern Ltd. has issued a preferred share with a par value of $60. The stated dividend rate is 6.3%. Find the price an investor would be willing to pay if the required rate of return is 8%. 3. Consider the following table relating probabilities of various states of the economy to the stock price of ABC, Ltd. State of Economy Probability Stock Price Boom 0.4 $40 Normal 0.5 $25 Recession 0.1 $10 A) Find the expected value of the stock price. B) Find the standard deviation of the stock price