You have produced an analysis of firm B finding that next year's EPS will equal $1.35. If the firm has a 20% payout ratio, and ROE of 15% for the next 3 years,

-What are the expected dividends in periods 1 through 3?

-Let the appropriate discount rate equal 10%. Suppose you assume the PE ratio (defined very specifically here in this example as PE,=P,/EPS,) at a time 3 equals 12. What price are you willing to pay for one share of the firm's stock today?

-Given the valuation from 4b, what is the present value of growth opportunities?