Please show all work and explain. Answers are given.

$58.$ TNK$,$ Inc. is expected to have earnings next year of $$2$ per share, and it employs a plowback ratio

of $30\%.$ TNK$$s capitalization rate is $15\%$ and it can earn $20\%$ on its investment opportunities.

a$.$ What is the TNK$$s intrinsic value? $$15\mathrm{.}56$

b$.$ What is the value of its PVGO? $$2\mathrm{.}23$

c$.$ What is TNK$$s price earnings ratio? $7\mathrm{.}78$

d$.$ Suppose TNK$$s ROE is $12\%,$ not $20\%.$ What would be its PVGO? $-$$$1\mathrm{.}05$

e$.$ And in this case, what would be its P$/$E$?6\mathrm{.}14$

$59.$ The required rate of return for a firm is $10\%,$ its dividend growth rate is $4\%$ and its plowback ratio

is $25\%.$

a$.$ What is the firm$$s price earnings ratio? $12\mathrm{.}50$

b$.$ What is the firm$$s ROE on investment opportunities? $16\mathrm{.}00\%$

c$.$ If the market expects the firm will have EPS next year of $$4,$ what is the firm$$s intrinsic

value? $$50\mathrm{.}00$

d$.$ Suppose instead the firm just paid a $$1\mathrm{.}20$ dividend. What is the firm$$s intrinsic value?

$$20\mathrm{.}80$

e$.$ In this case, what is the value of the firm$$s PVGO? $$4\mathrm{.}16$