AG, an investment firm requires its analysts to use a two-stage dividend discount model and the CAPM to value stocks. Using this approach, AG has valued XYZ Inc. at S63 per share. Now AG must value ABD Inc. Calculate the required rate of return for ABD, Inc. by using the information below: AG estimates 12% growth rate for ABD's EPS and dividends per share for the first three years, and 9% thereafter. ABD's dividends per share in the most recent year were $1.72. Using the two-stage dividend discount model estimate the intrinsic value of ABD. Recommend ABD or XYZ stock for purchase by comparing each firm's intrinsic value with current market price. Analyst #1 is forecasting 5% growth in dividends indefinitely. Analyst #2 however, is predicting a 20% growth in dividends but only for the next three years, after which growth rate is expected to decline to 4% for the indefinite future. Medical dividends per share are currently S3. Stocks with similar risk are currently priced to provide a 14% expected return. What is the intrinsic value of Medical stock according to Analyst #1? What is the intrinsic value of Medical stock according to Analyst #2? Assume that Medical stock now sells for $39.75 per share. If the stock is fairly priced at the present time, what is the implied perpetual dividend growth rate? What is the implied P/E_1 ratio (i.e., today's price over next year's earnings), based on this perpetual dividend growth assumption and assuming a 25% payout ratio