The table below lists some partial information about Hercules Inc.:

years	1	2	3	4	5
Beginning of Year Book Value of Equity ($m)	100	118
Earnings ($m)
Return on Equity (ROE, %)	20	20	20	15	15
Pay-out Ratio (%)	10	10	10	50	50
Dividends ($m)
Growth Rate of Dividends (%)	N.A.

Required:

a) Fill in all missing values in the table.

b) Assume that Hercules cost of equity capital is constant at 10% p.a. and that the firm enters a constant growth phase after year 4 (i.e., ROE and the pay-out ratio are constant thereafter). Calculate the intrinsic value of Hercules equity.

c) What is Hercules Present Value of Growth Opportunities (PVGO) at the end of year 4 (after the dividend payment)?

d) Now assume that, at the beginning of year 5, Hercules ROE drops to 11%. What is Hercules PVGO at the end of year 4 (after the dividend payment)? Explain the intuition for your answer.