The Digital Electronic Quotation System $($DEQS$)$ Corporation pays no cash dlvidends currently and is not expected to for the next five

vears. Its latest EPS was $$10\mathrm{.}50,$ all of which was relnvested in the company. The firm's expected ROE for the next five years is $19\%$ per

vear, and during this time it is expected to continue to relnvest all of its earnings. Starting in year $6,$ the firm's ROE on new Investments

s expected to fall to $14\%,$ and the company is expected to start paying out $25\%$ of its earnings in cash dividends, which it will continue

o do forever after. DEQS's market capitalization rate Is $19\%$ per year.

What is your estimate of DEQS's Intrinsic value per share? $($Do not round intermedlate calculations. Round your answer to $2$

decimal places.$)$

Intrinsic value

b$.$ Assuming its current market price is equal to Its Intrinsic value, what do you expect to happen to its price over the next year? $($Round

jour dollar value to $2$ decimal places.$)$

Price wil

by

$\%$ per year until year $6.$

Because there is $[($Click to select$)\frac{\frac{?}{?}}{?},$ the entire return must be in $[$Click to select$)V.$

Price in one year

c$.$ What do you expect to happen to price in the following year? $($Round your dollar value to $2$ decimal places.$)$

Price in two years

d$.$ What is your estimate of DEQS's Intrinsic value per share If you expected DEQS to pay out only $25\%$ of earnings starting in year $6?$

$($Do not round Intermedlate calculations. Round your answer to $2$ decimal places.$)$

Intrinsic value