Question: Hi! Please answer this question and show work to help me learn. Thank you! Question 13. Practice calculating forecasted price and intrinsic value in part

Hi! Please answer this question and show work to help me learn. Thank you!

Question 13. Practice calculating forecasted price and intrinsic value in part (a) and part (b).

(a) A firm just reported EPS of $5. If EPS are expected to grow at 1.6%, and if the PE ratio of this firm is expected to be 17.9, what is the firm's forecasted price in 6 periods?

(b) A firm is expected to make four dividend payments of 1.40. Then dividends are expected to stop for 5 periods. At that point the stock has a forecasted EPsS of $12.60 and a PE ratio of 13.2. If the required return of the stock is 15%, what is its intrinsic value?

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