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The risk-free rate of 1%, the expected rate of return on the market portfolio is 12% and the ArtiSoft pays out 20% of its earnings

The risk-free rate of 1%, the expected rate of return on the market portfolio is 12% and the ArtiSoft pays out 20% of its earnings in dividends and the latest earnings announced were $10 a share. Dividends were just paid and expected to be paid annually. You expect that ArtiSoft will earn an ROE of 18% per years on reinvested earnings forever.

what is the intrinsic value of a share of ArtiSoft stock?

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