Rocky Inc. has paid a dividend of $2.20 per share during the past year, an amount that investment analysts believe will grow at an average rate of 5% for the foreseeable future. If the market price of risk is 6%, the risk-free rate is 3%, and the beta on Rocky common shares is 0.90, what is the intrinsic value of Rockys common shares?

1. $46.20

2. $64.71

3. $27.50

4. $67.94