The risk-free interest rate is 9% and the

expected rate of return on the market portfolio is 15%. Ngwenya Corporation, a

South African software firm, has a beta coefficient of 1.1.  The company pays out 40% of its earnings as

dividends, and its most recent earnings were R10 per share.  Dividends have just been paid and are

expected to be paid annually. It is assumed that Ngwenya will earn a 20% return

on equity (ROE) on all reinvested earnings to infinity. What is the intrinsic

value of Ngwenya Corporation’s share?