Question $1$

Chief Medical, Inc. is a little$-$known producer of heart pacemakers. The earnings and dividend growth prospects of the company are disputed by analysts.

Albert Bender at Goldman Sachs is forecasting $5\%$ growth in dividends indefinitely. However, Mary Montgomery at Morgan Stanley is predicting a $20\%$ growth in dividends, but only for the next three years, after which the growth rate is expected to be $4\%$ forever.

The Chief Medical annual dividend per share was $$3\mathrm{.}00$ for the most recent $12$ months and was paid recently. Stocks with similar risks currently are priced to provide a $14\%$ rate of return.

a$.$ What is the intrinsic value of a share of the stock according to Albert?

b$.$ What is the intrinsic value of a share of the stock according to Mary?