Previous Problem CFBP corp recently paid a $20 dividend. Dividends are expected to double in each of the next two years, then grow at 50% for the following 2 years. You predict that the stock will be worth $400 in 4 years time. The risk free rate is 4%, the Market Risk Premium is 3%, and the firm has a beta of 2.

2. Assume the same information as in the previous problem but that instead of having a prediction of CFBPs stock price in 4 years, you instead assume that dividends will grow at a steady-state 5% annually after the 4th year. Now what is CFBPs intrinsic value?

Solve problem two