Intrinsic Value Calculation of Common Shares

Alex is analyzing the performance of a technology company, Tech Innovations Inc., which trades on the NYSE. The company has a current stock price of $150 per share and is expected to pay an annual dividend of $4 per share next year. Alex recognizes that the required rate of return on equity for Tech Innovations is 12%. Based on this information, Alex is considering whether the stock is fairly valued. He recalls the Gordon Growth Model is commonly used to evaluate the intrinsic value of a stock based on its expected future dividends.

According to the Gordon Growth Model, the intrinsic value of a stock can be calculated using the formula: V = D / (r - g), where:

V = the intrinsic value of the stock, D = the expected annual dividend next year, r = required rate of return, and g = growth rate of dividends.

Alex currently estimates that a sustainable growth rate of dividends (g) for Tech Innovations is 5% due to the company’s strong market position and continuous investment in research and development.

Using the above information, what is the intrinsic value of Tech Innovations Inc.'s stock, and based on this intrinsic value, is the stock considered fairly valued?