QUESTION 5 Analyst forecasts of earnings per share and dividends per share for IMD Ltd. over the next two years are as follows: 2021E: EPS = 13.00 DPS = 3.00 2022E: EPS = 14.50 DPS = 3.30 Analysts have also confirmed that IMD has a current book value is $20 per share, the beta on its common shares is 0.75, the current market price of risk is 6% and the risk-free rate is 3%. Based on these inputs and using the abnormal earnings valuation model, what is the intrinsic value of IMD's common shares assuming that abnormal earnings will grow at an average rate of 3% after 2022 and the number of common shares outstanding will not change? 1. $186.88 2. $276.86 3. $283.93 4. $263.93