Chiptech, Inc., is an established computer chip firm with several profitable existing products as well as some promising new products in development. The company earned $1.00 a share last year, and just paid out a dividend of $0.50 per share. Investors believe the company plans to maintain its dividend payout ratio at 50% ROE equals 20%. Everyone in the market expects this situation to persist indefinitely. What is the market price of Chiptech stock? The required rate for the computer chip industry is 15% and the company has just gone ex-dividend. Suppose you discover that Chiptech'S. competitor has developed a new chip that will eliminate Chiptech'.s. current technological advantage in this market. As a consequence, the company ROE will decline to 15% and its plowback will be cut back to 0.4 after 2 years. What is your estimated the stock's intrinsic value in view of this information