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A firm recently paid its annual dividend of $3.47, and reported an ROE of 5%. The firm pays out 50% of its earnings as dividends.

A firm recently paid its annual dividend of $3.47, and reported an ROE of 5%. The firm pays out 50% of its earnings as dividends. The stock has a beta of 1.02. The current risk-free rate is 4.55% and the market return is 18.00%. Assuming that CAPM holds, what is the intrinsic value of this stock?

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