You are evaluating a stock that generated $14.87 of earnings per share, while

paying out 27% as dividends last year. The company currently has a share price

of $108.49and a book value per share of $82.16. The company indicates it has

fewer profitable project to invest in and will increase the payout ratio to 64%

following two more years at the current payout rate. You believe the market

has yet to price in this news. However, you do not expect the required rate of

return to change from the current level. Assuming the company can maintain

its ROE, estimate the intrinsic value of the stock given the news of an increased

payout ratio in year 3.