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ABC Company plans to pay its first dividend of $0.49 1 year from today (=Year...

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Finance

ABC Company plans to pay its first dividend of $0.49 1 year from today (=Year 1), then to increase it at a relatively rapid rate in Year 2, and then to increase it at a constant rate of 6% thereafter. The company requires 15% for stockholders' annual returns.

Year 0 1 2 3
Growth rate N/A N/A 50% 6%
Dividends $0.00 $0.49 ? ?

What is your estimate of the stock's current value? Round your answer to two decimal places of dollar, but do not enter $ in your answer, e.g., xx.xx. (Hint: Make sure to measure and include the PV of P5 using the CDG model.)

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