Multistage Growth At the beginning of 2010 stock of Boatright Stores is projecting the following dividends

Year	Dividend
2010	0.90
2011	1.00
2012	1.22

After this dividend growth will be steady. Value Line forecasts a retention rate of 55% and a long term ROE of 13%. The required return for Boatright is 18%. The intrinsic value of Boatright is ________.

$9.56

$-5.47

$-3.23

$8.41

Beta and Value A firm is expected to pay an annual dividend of $.90 next year. After next year the firms dividends will grow at a steady state rate of 4% per year. You are trying to value the stock and Value Line lists a stock beta of 1.29 while Yahoo is reporting a beta of 1.20. The stock is currently priced at $13.10. If E(R_M) Rf = 9.1% and the risk free rate is 3.2% the stock is ____________________ if you use the Value Line beta and is ____________________ if you use the Yahoo beta.

underpriced by $1.31; underpriced by $1.61

overpriced by $4.21; overpriced by $4.87

overpriced by $4.87; overpriced by $4.21

underpriced by $1.61; underpriced by $1.31