1.The ABC Company will experience a 25% growth rate over the next three years and pay no dividends over that time. Growth will then fall the 6%, at which time the company will institute a 40% payout ratio. You expect the dividend in year four to be $2 per share. The required return is 10%, what is the firms intrinsic value today?

2. An investor is analyzing a firm that has a historical earnings retention rate of 60% and you forecast this retention rate to continue into the future. You believe that the firm can achieve a constant ROE of 15%. The stocks beta is 1.2. The risk-free rate is 8% and the expected market return is 13%. If the investor thinks that next years earnings will be $3.00 per share, what is the stocks intrinsic value?