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

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

is 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

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

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

decimal places.$)$

Answer is not complete.

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

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

Answer is not complete.

$\backslash$table$[[$Price will,rise,by$,,$per year until year $8.]]$

Because there is

$.$ the entire return must be in

Answer is not complete.

Price in one year

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

Answer is not complete.

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