Voittenock corporation (VC) has. Just an annual dividend of $1.10 per share and the stock is selling for $24. During the past year, VC 's EPS was $2.40.

a. Analyst John expects VC 's dividends to grow 10% annually for the next two years . After two, he expects dividend growth to decline to a long term rate of 3%. John believes the appropriate required return for this stock is 12%. Determine John's intrinsic value estimate for VC shares.

b. Analyst Carl believes the appropriate required return for VC is 12%. However , he sees a very different scenario . He expects no dividends to paid during the next two years while EPS grows 15% annually. Carl uses a trailing P/E approach to valuation . He expects the stock to sell at a P/E of 10 at that time.

1 . Derive the expected value of the stock after two years based on Carl assumption

2. Should Carl recommend to purchase the stock?