Please show all work and explain. Correct answers are given. If you dont know how to do it correctly please just dont answer.

ELA, Inc. will pay a $

$0$

$.$

$6$

$0$

$$dividend today. The dividend is expected to triple in the first year and

then double in the second year. After that the dividend will grow at a constant annual rate of

$5$

$\%$

$.$

ELA

$$

s capitalization rate is

$1$

$1$

$.$

$0$

$\%$

$.$

$$

a

$.$

$$What is ELA

$$

s intrinsic value today? $

$5$

$5$

$.$

$6$

$8$

b

$.$

$$What do you expect will be ELA

$$

s stock price three years from today? $

$6$

$6$

$.$

$1$

$5$

$2$

$.$

$$TPHB Inc. is expected to have earnings next year of $

$7$

$.$

$5$

$0$

$$per share, and it employs a plowback

ratio of

$6$

$0$

$\%$

$.$

$$TPHB

$$

s capitalization rate is

$1$

$4$

$\%$

$$and it can earn

$1$

$6$

$\%$

$$on its investment opportunities

$($

ROE

$)$

$.$

$$Its current stock price is $

$6$

$8$

$.$

$1$

$8$

$.$

$$

a

$.$

$$What is the value of TPHB

$$

s PVGO? $

$1$

$4$

$.$

$6$

$1$

b

$.$

$$If TPHB reduced its plowback ratio to

$4$

$0$

$\%$

$,$

$$what would you expect its current price to b

$?$

$

$5$

$9$

$.$

$2$

$1$