. Delphi Products Corporation currently pays a dividend of $2 per share, and this dividend is

expected to grow at 15% percent annual rate for many years to come. The corporation has

found an index of systematic risk of 1.60. Short-term Treasury securities rate is 10% and the

expected return on the market portfolio is 14%. What will happen to the intrinsic value per

share? If the stock is currently selling for $187, is this stock overvalued or undervalued and

why?