The Digital Electronic Quotation System $($DEQS$)$ Corporation pays no cash dividends currently and is not expected to for the next five years. Its latest EPS was $$17\mathrm{.}00,$ all of which was reinvested in the company. The firm's expected ROE for the next five years is $15\%$ per year, and during this time it is expected to continue to reinvest all of its earnings. Starting in year $6,$ the fifrm's ROE on new investments is expected to fall to $10\%,$ and the company is expected to start paying out $20\%$ of its earnings in cash dividends, which it will continue to do forever after. DEQS's market capitalization rate is $26\%$ per year.

Required:

a$.$ What is your estimate of DEQS's intrinsic value per share?

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?

c$.$ What do you expect to happen to price in the following year?

d$.$ What is your estimate of DEQS's intrinsic value per share if you expected DEQS to pay out only $15\%$ of earnings starting in year $6?$