Question: please answer both parts to the question and show/write out your work:) 8. Seinfeld Inc. just paid a dividend of $1.25 and projects supernormal growth

please answer both parts to the question and show/write out your work:)

8. Seinfeld Inc. just paid a dividend of $1.25 and projects supernormal growth of 25% for the next two years. Growth is the expected to slow down to a normal 5%. Similar stocks are earning investors a return of 10%. a. What is the intrinsic value of this stock? (5 points) b. If the stock is selling for $45 on the NYSE, should you buy it? Why or why not

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