3) (4 pts) You estimate Company C will have EPS of $2.00 one vear from now and EPS of $2.20 twoyears from now. After year 2, you assume the company's earnings will grow at a constantrate of 6%. The dividend payout ratio is expected to remain constant at 20%. The appropriate discount rate for this company is 8.0%.

a)Based on a constant growing perpetuity estimation, what is the expected seling price of Company C's stock in two years? What is the implied P/E multiple in two years based ofa.your model?The stock will sell for $in two yearsThis implies a P/E Multiple ofin two yearsb.

b)What is your estimate of the intrinsic value of the stock today?