The expected rate of return on the market portfolio is 16%, the risk-free rate is 9.00%, and the stock of SportX Corporation has a beta coefficient of 1.50. Last month SportX announced their latest earnings of $15 per share. The company pays out 40% of its earnings in dividends. The dividends were just paid (2 weeks ago) and are expected to be paid annually. You estimate that SportX will earn an ROE of 20% per year on all reinvested earnings forever.

a.	What is the intrinsic value of a share of SportX stock?

b-1.	If you expect the market price to be equal to the intrinsic value one year from now, calculate the price of the share after one year from now.

b-2.	If the market price of a share is currently $87, what is your expected one-year holding-period return on SportX stock?