Question 1. Sans Limited, a software firm, pays out 20% of its earnings as dividends. The most recent earnings announced were $20 per share. Dividends were just paid and are expected to be paid annually. A Sans share has a beta coefficient of 1.4 and you expect that the firm will earn a ROE of 15% per annum on all reinvested earnings forever. The risk-free interest rate is 9% and the expected rate of return on the market portfolio is 15%.

Q1. What is the intrinsic value of a share of Afrinet using the Gordon growth model?