30 An analyst gathers the following information about a company's common stock:

• Most recent annual dividend per share: €2.00

• Initial dividend growth rate: 20%

• Length of period over which dividend declines linearly to perpetual growth rate: 8 years

• Perpetual growth rate of dividends: 5%

• Current share price: €33.50

The analyst considers a security trading within a band of +/- 10% of her estimate of intrinsic value to be fairly valued. If the required return is 15%, the common stock is: