Assume today is 31 December 2021. Firm A, a commodity producer, is expected to adopt the following payout policy for the next 4 years:

Year: 2022, 2023, 2024, 2025

Div($m) 9, 12, 5, 0 respectively

The estimated net profit after tax is $50 million for the year 2025. The company has no preference share financing, and does not plan to do so for the next 4 years. The expected price-earnings ratio by the end of year 2025 is 15 times. Shareholders of Firm A require a return of 10 percent for shares in this risk class.

Required a. Compute the intrinsic value of Firm As common shares.