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You are a financial analyst at Bank of America and you have collected following information for Lotus Tech Company. The company has beta of 1.5 and a ROE of 20%. The dividend payout ratio is 50%. Last twelve month earnings were $4 per share. The annual dividend was just paid. The consensus estimate of the coming year’s market return is 11%, and T-bills currently offer a 8% return.
(keep two decimal places please.)
a. What is the required rate of return of the stock? (input format: 15.32%)
b. What is the growth rate of the stock? (input format: 15.32%)
c. What is the intrinsic value of the stock? (input format: $15.32)
d. What is PVGO of the stock? (input format: $15.32)
e. Suppose your research convinces you that company will announce momentarily that it will immediately change its dividend payout ratio to 75%. Find the intrinsic value of the stock. (input format: $15.32)

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