Lazenby plc has been set up to exploit on opportunity to import a new product from overseas. It has issued two million ordinary shares of par value $0.25, sold at a 25 per cent premium. Its projected accounts show the following annual operating figures:

Sales revenue $500,000

Operating costs ($300,000)

(after depreciation of 50,000)

Operating profit $200,000

Taxation at 30% ($60,000)

Profit after tax $140,000

Notes:

(i) Shareholders require a return of 10 per cent p.a.

(ii) Replacement investment is financed out of depreciation provisions and is fully tax-allowable.

(iii) 2 per cent of sales should be written off as bad debts.

(iv) Bad debt write-offs are 50 per cent tax-allowable.

Required

Value each share in Lazenby:

(a) Assuming perpetual life.

(b) Over a 10-year horizon.