Monfort, Inc., declared the following data for the last FY:

Earnings per Share = $3

Total Debt = $ 12.5

Total Debt ratio (TD/TA) = 1/2

Dividend per Share paid = $ 0.9

In addition a Bloomberg analyst estimates the following regression equation on 5-year biweekly return observations:

E(RMonfort) = 0.5% + 1.52*(RSP500)

Expected return on SP500 index =13%

10-year T-note rate = 3%.

Actual stock price per share = $54.5

Based on this information estimate the intrinsic value per share for this stock. What is the best trading strategy you would suggest and why?

i dont know whether the growth rate is right or not

T-note rate (risk free return)=3% current ratio=$54.5 Dividend ratio=0.9/3=30% Return on Equity=Rf+Beta(Rm-Rf)=3%+1.52(13%-3%)=18.2% Growth rate=ROE*Retention ratio RR=1-Dividend ratio=70% I Growth rate=18.2%*70%=12.74% Intrinsic Value=