Question: An analyst is provided the following information regarding Alpha Ltd. The company's current book value per share equals $8.00. The company's EPS for the next

 An analyst is provided the following information regarding Alpha Ltd. The

An analyst is provided the following information regarding Alpha Ltd. The company's current book value per share equals $8.00. The company's EPS for the next 3 years is expected to be $2.25, $3.00, and $4.50 respectively. The company's DPS for the next 3 years is expected to be $1.25, $2.00, and $14.50 respectively. The Year 3 dividend is expected to be a liquidating dividend, i.e.. the company is expected to cease its operations at the end of Year 3 and distribute its entire book value in a dividend. Given a required rate of return on equity of 10%: Calculate Alpha's book value and residual income for the next 3 years. Estimate the intrinsic value of Alpha's stock using the residual income model. Estimate the intrinsic value of Alpha's stock using the dividend discount model

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