a.
The terminal, or horizon, date is the date when growth rate becomes constant, This occurs at the end of Year 2.
b.
Horizon Value = 1.75(1.14)2(1.08)/(0.13 - 0.08)
Horizon Value = $49.12
c.
Intrinsic Value = 1.75(1.14)/(1.13) + 1.75(1.14)2/(1.13)2 + 49.12/(1.13)2
Intrinsic Value = $42.02
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