Question Six: DDM - Two-Stage Model Amsterdam Company is preparing a fairness opinion in response to an offer it has received to buy the company. The following information was collected: Beta High-Growth Stage 1.2 20% 25% 0.50 3 years Stable-Growth Stage 1.0 8% 75% Return on assets Payout ratio Debt ratio Length 0.60 Infinite EPS was $4.50 in the previous year. The risk-free rate is 7.5 percent and the market risk premium is 5.5 percent. (Hint: Dividends = d x EPS] REQUIRED: 1. Estimate the intrinsic value of Amsterdam's shares. Question Six: DDM - Two-Stage Model Amsterdam Company is preparing a fairness opinion in response to an offer it has received to buy the company. The following information was collected: Beta High-Growth Stage 1.2 20% 25% 0.50 3 years Stable-Growth Stage 1.0 8% 75% Return on assets Payout ratio Debt ratio Length 0.60 Infinite EPS was $4.50 in the previous year. The risk-free rate is 7.5 percent and the market risk premium is 5.5 percent. (Hint: Dividends = d x EPS] REQUIRED: 1. Estimate the intrinsic value of Amsterdam's shares