The following info is provided for company X Earnings per share 1,56 Dividen per share which was just distributed 0,69 Earnings percentage distribution, stable for the next 5 years 44% return on equity= ROE 24% Current share market price 30

For the next 5 years it is estimated that company will have a big growth. The expected growth rate (g) (of shares and dividents) is expected to be 13.03% After the 5th year, the growth rate of the earnings ( g_i), where I = 6 to 10, is expected to be gradually reduced to 5.6% as follows: g6 = 11,46%, g7 = 9,9%, g8 = 8,5%, g9 = 7,05%, g10 = 5,6%. The distribution percentage for all years from the 6th year and onwards will be decreased from 44 to 40%. After the 10th year, the expected growth rate (g) (of shares and dividends) is expected to remain stable equal to 4% forever. The cost of equity is 9.5%.

Calculate earnings per share and dividends per share for years 1 to 10. Calculate fair price of the share. Explain whether the shares are overvalued or undervalued. Having in mind the share market price, what would you recommend to the shareholders?