An analyst gathered the following information regarding Pluto Inc.:

• Expected EPS for 2011 = $4.25
• Retention rate = 0.4
• Required return = 11%
• Current stock price = $54.85

Dividends are paid out at the end of the year and are expected to grow at a rate of 5.5% forever.

The intrinsic value of the stock at the end of 2010 is closest to:

1. 46.36

2. 77.27

3. 30.91