Suppose you gathered the following information about Omicron-Q-M Inc.:

Current year (2015) EPS = $4

Plowback ratio = 0.4

Required return = 12%

Current stock price = $50

Dividend growth rate in the foreseeable future = 5%

(a) Given that dividends are paid out at the end of the year,

i) Estimate the intrinsic value of the company's stock at end of 2015.

ii) Comment on whether the company is currently over-valued, under-valued or fairly-valued.

iii) Estimate the present value of growth opportunities (PVGO)

iv) Estimate the fraction (percentage) of the company's leading P/E ratio that comes from PVGO

(b) Besides the method in (a), estimate the P/E of the company's stock using:

i) Justified/theoretical trailing P/E

ii) Trailing P/E based on the market price

iii) Comment on whether the company is currently over-valued, under-valued or fairly-valued.