1.Hewlett-Packard's (HP) expected dividends for the coming year are $0.60 and expected earnings per share are $0.80.The required rate of return for HP is 15%.HP's ROE is 18% and plowback ratio is 25%.

A.Using the constant-growth dividend discount method, calculate the firm's intrinsic value.(10 points)

B.Calculate the present value of growth opportunities for HP.(10 points)

C.Suppose you found a positive PVGO for HP.In this case, should the firm continue with its current dividend policy or should it instead pay out 100% of earnings as dividends?(5 points)