2. Dorne PLC's current policy is to pay no cash dividends. It is not expected to pay any dividends for the next seven years. Its latest EPS was 25, all of which was reinvested in the company. The company's expected ROE (return on investment) for the next seven years is 30% per year, and during this time it is expected to continue to reinvest all of its earnings. Starting in year eight, the company's ROE on new investments is expected to fall to 12%, and the company is expected to start paying out 25% of its earnings in cash dividends. It will continue to do this forever after. Dorne PLC's market capitalisation rate (investor/market required rate of return) is 10% per year. What is your estimate of Dorne PLC's current price value per share? [12 marks] 3. List the key issues (criticisms) of the constant dividend valuation model. [3 marks] [Total: 25 marks]