JNJ just reported earnings and their stock sold off in the market. JNJ reported eps for full year 2022 of $10.15. They also just paid a dividend of $4.80. Analysts expect earnings growth of 8% over the next few years. Your boss asks you to put together a quick valuation of the company to assess whether it could be undervalued. JNJ has a beta of 0.60 and the risk-free rate and market rate of return are 4.0% and 9.5%, respectively. Assume the following: 

a. (20 pts) JNJ is expected to grow at 8% for the next 4 years, then settle into a secular growth rate of 4%. JNJ intends to maintain a constant payout ratio. JNJ is currently trading at $161. What is your intrinsic value for JNJ? 

b. (4 pts) What is the percentage return to fair value? 

c. (6 pts) What secular growth rate does JNJ's current stock price imply?