Corporation X has been paying dividends of $0.90 per share. Assume it has a cost of equity capital of 8.5%. The stock has recently traded around $15 per share.

a). Assuming the dividend will continue to stay at $0.90 per share on a continuing basis, what is the estimated value per share for Corporation X?

b). Given the difference between the estimated value and the trading price, what inferences can be made?