1. The DEQ Corporation pays no cash dividends currently and is not expected to for the next five years. Its latest EPS was $10, all of which was reinvested in the company. The firm's expected ROE for the next five years is 20 percent per year, and during this time it is expected to continue to reinvest all of lits earnings. Starting six years from now the firm's ROE on new investments is expected to fall to 15 percent, and the company is expected to start paying out 40 percent of its earnings in cash dividends, which it will continue to do forever after. DEQ's market capitalization rate is 15 percent per year. (a). What is your estimate of DEQ's intrinsic value per share? (b). Assuming its current market price is equal to its intrinsic value, what do you expect to happen to its price over the next year? The year after? (c). What effect would it have on your estimate of DEQ's intrinsic value if you expected DEQ to pay out only 20 percent of earnings starting in year 67