Please help with the following question:

A company is expecting an ROE of 15% over each of the next five years. Its current book value is $5.00 per share, it pays no dividends, and all earnings are reinvested. The required return on equity is 10%. Forecasted earnings in years 1 through 5 are equal to ROE times beginning book value. The intrinsic value of the company using a residual income model, assuming RI declining over time as ROE approaches cost of equity (at which time Ri=O), and assuming P/B = 1.2 and persistence factor is = 0.4, is closest to: O $6.40 O $6.89 O $7.12 A company is expecting an ROE of 15% over each of the next five years. Its current book value is $5.00 per share, it pays no dividends, and all earnings are reinvested. The required return on equity is 10%. Forecasted earnings in years 1 through 5 are equal to ROE times beginning book value. The intrinsic value of the company using a residual income model, assuming RI declining over time as ROE approaches cost of equity (at which time Ri=O), and assuming P/B = 1.2 and persistence factor is = 0.4, is closest to: O $6.40 O $6.89 O $7.12