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Lesus Inc. has decided to expand its business by establishing a subsidiary in Australia for accommodating the increase in foreign aggregate demand and expected to

Lesus Inc. has decided to expand its business by establishing a subsidiary in Australia for accommodating the increase in foreign aggregate demand and expected to start to operate at the beginning of year two. Assume there is no growth of the dividend before the subsidiary starting to operate. Financial analysts in the company predict that the firm will grow at an extraordinary rate of 25% for 3 years after the new subsidiary started to be operated, followed by another 1 years of unusual growth of 15%, and finally grow at 7% per annum for an indefinite number of years. The company just paid a dividend of RM0.80 per ordinary share. The required rate of return for the companies with same nature of business is 15%. Compute the intrinsic value of the target firm be today.

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