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The economy wide real risk free interest rate is 2.5%, the inflation premium is 1.0%, and the market risk premium is 9.0%. At the same
The economy wide real risk free interest rate is 2.5%, the inflation premium is 1.0%, and the market risk premium is 9.0%. At the same time, the Company's beta is 1.55, its dividend growth rate is 4.0%, and it just paid a dividend of $1.60 per share. The company anticipates a change in production plan that should affect its beta and dividend growth rate. The new beta becomes 1.30 and the growth rate becomes 5.00%. What is the likely resultant percentage change in the intrinsic value of the company's shares?
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