Question 3 a) CVX Tech is known for creating innovative technology solutions for electric vehicle manufactures. Three years ago, the company has raised $80 million through an IPO. However, it has not earned any prot so far. Analysts are expecting that CVX will earn a prot of 80 cents per share next year. The forecasted earnings per share for following two years are $1.2 and $1.5. Then onwards the rm's dividends are expected to grow at a constant rate. The rm's ROE is expected to be 20% and the rm plans to to distribute about 40% of its earnings as dividends in future. CVX's cost of equity is estimated to be 15% pa. i) Based on the information estimate CVX's intrinsic value using a multistage dividend growth model. Show your calculations. ii) Do you think a dividend discount model is appropriate for valuation of a rm like CVX? Briey discuss your answer with explanation