You are now trying to value Boston Turkey. For purposes of simplicity, the relevant information about the company is reproduced here -- Current Numbers: Earnings per share = $ 2.40

Net Income = $240,000 Dividends per share = $ 1.00

Interest Expenses = $100,000 Market price per share = $ 20

Book Value of Debt = $1,000,000 Number of shares = 100,000

Book Value of Equity = $1,500,000 Market Value of Debt = 1,250,000

Tax Rate = 40% Due to its limited history, the beta of the stock cannot be estimated from past prices. You do have information about comparable listed firms and their betas --

FIRM	BETA	D/E Ratio
Kentucky Fried Chicken	1.05	20%
Hardee's	1.20	50%
Popeye's Fried Chicken	0.90	10%
Roy Rogers	1.35	70%

(The comparable firms all have a tax rate of 40%) [ This is the same information you were given in problem 1. You can use the beta estimated from that section in this problem.] BETA ESTIMATE OF 1.20 a. Assuming that these numbers are sustainable for the next three years, what is the expected growth rate in earnings per share for this period? b. The growth rate after year 3 is expected to be 6% forever. What will the price per share be at the end of year 3? c. What is the value per share using the dividend discount model?