Based on the Information Provided, Calculate the Intrinsic Value in 2010

Multiple Choice

Based on the information provided, calculate the intrinsic value in 2010 of a share of INV Corp. using the Present Value of Earnings Model (infinite holding period) . For 2010 net income was $250,000, total debt was $50,000, and there were 206,263 shares outstanding. The required rate of return is 12 percent, and the estimated growth rate in earnings is 5.5 percent.

A) $19.43
B) $23.98
C) $28.52
D) $22.73
E) $15.50