What is the intrinsic value of windsor widgets stock

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Windsor Widgets paid a $1.25 dividend to its shareholders yesterday. The CFO of the company believes that dividends can be increased by 5% per year indefinitely and that the stock market (as measured by the S &P 500) will go up by 10% next year. Value Line estimates that the company has a beta of 1.6 and says that the current interest rate on Treasury bonds is 4%. Given this information, what is the intrinsic value of Windsor Widgets stock?

Reference no: EM132685912

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