Following table shows the dividend scheduled by Honda for year 2009-2012. Assume the dividend growth rate will be steady beyond 2012. Value Line forecasts the retention ratio b = 70% and ROE of 11.0%. The stock price for Honda at the end of year 2008 is $21.37.

Year	Dividend
2009	0.90
2010	0.98
2011	1.06
2012	1.15

a) What should be the long term growth rate for Honda?

b) Assume bHonda = 1.05, risk free rate in 2008 is 3.5%, and Market risk premium is 8%, what is the required rate of return for Honda?

c) Find the intrinsic value for Honda at 2008

d) How do we interpret the intrinsic value we estimated, what if real bHonda = 1.10?