Response to the following problem:
Melissa Popp is thinking about buying some shares of Education Pty Ltd at $50 per share. She expects the price of the shares to rise to $75 over the next three years. During that time she also expects to receive annual dividends of $5 per share.
a. What is the intrinsic worth of this share, given a 10% required rate of return?
b. What is its expected return?