You have the following information for Research Lab, Inc.:

• The stock is currently trading at $8.75
• Expected ROE = 16% annually for each of the next four years
• Current book value of equity =$435, 000, 000
• Shares outstanding: 60 million
• Required rate of return on equity = 12%
• No dividends paid and all earnings are reinvested
• Continuing residual income = 0 after four years

1. The Year 3 residual income is $_____ 2 decimal places)
2. Based on the residual income model, the intrinsic value of Research Lab, Inc., is $______. (2decimal places)