Two-stage dividend discount model

Problem: Using 2-stage DDM and CAPM to value stocks:

Beta of company: 1.15
Market price: $30
Intrinsic value: ?
Risk-free rate 4.50%
Expected market return: 14.5%

EPS and dividend growth rates for first 3 years: 12% per year

EPS and dividend growth rates thereafter: 9% per year

Estimate the intrinsic value oif the company using the data and the 2-stage dividend discount model.

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Finance Basics: Two-stage dividend discount model
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