You purchase the shares of Reliable Electronics, Inc. (NYSE: RE) now and expect to hold them for four years. You are planning to sell the stocks at the end of Year 4. You collected the following information:

• Dividend forecasts: $1.20 in Year 1, $1.30 in Year 2, $1.40 in Year 3, $1.50 in Year 4.

• Dividend growth rate levels off in the fourth year and stays constant thereafter. Value Line forecasts a dividend payout ratio of 0.60 and a ROE of 10.0%.

• Beta of RE = 1.2

• Risk-free rate = 1.40%

• Forecast of market risk premium = 5.5%

Estimate the REs intrinsic value as of Year 0 (today). Assume efficient prices when estimating the future stock price at which you can sell your shares of RE at the end of Year 4, when dividends enter a constant growth phase.