Bell Inc., an allequity financed firm, just reported EPS of $5.00 per share for 2017. Despite the economic downturn, Bell Inc. is confident regarding its current investment opportunities. But due to the financial crisis, Bell Inc. does not wish to fund these investments externally. The Board has therefore decided to suspend its stock repurchase plan and cut its dividend to $1 per share (vs. almost $2 per share in 2016), and retain these funds instead. The firm has just paid the 2017 dividend, and Bell Inc. plans to keep its dividend at $1 per share in 2018 as well. In subsequent years, it expects its growth opportunities to slow, and it will still be able to fund its growth internally with a target 40% dividend payout ratio, and reinitiating its stock repurchase plan for a total payout rate of 60%. (All dividends and repurchases occur at the end of each year.) Suppose Bell Inc. existing operations will continue to generate the current level of earnings per share in the future. Assume further that the return on new investment is 15%, and that reinvestments will account for all future earnings growth (if any). Finally, assume Bell Incs equity cost of capital is 10%. a. Estimate Bell Incs EPS in 2018 and 2019 (before any share repurchases). b. What is the value of a share of Bell Incs at the start of 2018?