Constant growth model - Example Company A has just paid its annual dividend of $3 per share. The dividend is expected to grow at a constant rate of 8% indefinitely. The beta of its stock is 1, the risk-free rate is 6% and the market risk premium is 8%. 1. What is the intrinsic value of the stock? 2. What would be your estimate of intrinsic value if you believed that the stock was riskier, with a beta of 1.25