26. Weisman Electronics from the previous problem is considering acquiring an unrelated business. Management thinks the move could change the firm’s stock price by moving its beta up or down and decreasing its growth rate. A consultant has estimated that Weisman’s beta after the acquisition could be anywhere between 1.3 and 1.7 while the growth rate could remain at 4% or decline to as little as 3%.

Calculate a range of intrinsic values for Weisman’s stock based on best-and-worst case scenarios. (Hint: Consider combinations of the highest and lowest beta and growth rate, but don’t make four sets of calculations. Think through which way a change in each variable moves stock price and evaluate only two scenarios.)