ABC Company shares are currently (early 2005) trading at $25 per share. The financial analysts collected the following information: The company has just made a net profit of $45 million (end of 2004) The outstanding shares of ABC are 18 million Management's usual policy is to reinvest 70% of benefice Enterprise beta is 1.3 2005 earnings per share are expected to be 20% higher than 2004. The risk-free rate of return is rs=6% The anticipated market rate of return is 15% The annual growth rate of earnings per share will be 10% from 2006 to 2008 inclusive. Thereafter, the growth rate will be 8% and this indefinitely.

Based on the information above: a) Determine the required rate of return on the shares of company ABC b) Determine the next dividend per share (end of 2005) c) Determine the intrinsic value of this action at the beginning of the year 2005