Hal Wipley is the owner of Samantha Company and has hired Jenna Walters, CBV to value his firm as he is contemplating retirement. Walters made the following estimates:

High-Growth Stage Stable-Growth Stage

Return on assets 18% 9%

Payout ratio 25% 75%

Debt ratio 20% 40%

Length 2 years Indefinite

Beta 1.36 1.00

Walters expects the high-growth stage to phase into the stable-growth stage evenly over a two-year period, before reaching stable growth in Year 5. Dividends per share are currently $6.40. The risk-free rate is 4.0 percent and the market risk premium is 5.0 percent.

REQUIRED: 1. Estimate the intrinsic value of Samantha Companys shares.