StoreAge Inc. recently paid its annual dividend ($3.00), and reported an ROE of 15%, of which 50% is paid as dividends. The stock has a beta of 1.28. The current risk-free rate is 2.60% and the market risk premium (RM - RF) is 7.00%. Assuming that CAPM holds, what is the intrinsic value of this stock?
a) $75.43
b) $85.76
c) $79.43
d) $76.57
e) $75.75
