Janet Ludlows firm requires all its analysts to use a two-stage DDM and the CAPM to value stocks. Using these measures, Ludlow has valued QuickBrush Company at $63 per share. She now must value SmileWhite Corporation.

ecember 2010

	Quick Brush	SmileWhite
Beta	1.35	1.2
Market Price	$45	$30
Intrinsic Value	$63	?

Return for Smile white is .166, Risk Free is .04, and Market return is .145

Ludlow estimates the following EPS and dividend growth rate for SmileWhite:

First Three years:	15% per year
Years thereafter:	12% per year

Estimate the dividend value of SmileWhite in 2011 and 2012 using the table above and the two-stage DDM. Dividends per share in 2010 were $1.

Year	Dividends
2010	$1.00
2011	???
2012	???