2) (4 pts) You estimate that Company A will have EPS of $4.00 next year, $4.50 per share in year 2.The required rate of return is 8.0%.

a) What is your estimate of Company A's intrinsic value if you expect the company to have a dividend payout ratio of 20% and sell at a P/E multiple (ttm) of 25 at the end of year 2?

b) If Company A is selling at $94.00 today, would you consider the stock to be a good buy today? Good Buy? (Yes or No)