ABC CORP. EXPECTS ITS EARNINGS AND DIVIDENDS TO GROW AT 18% OVER T...

13. ABC Corp. expects its earnings and dividends to grow at 18% over the next 2 years and 15% in the 3

^rd

year and then at a constant rate of 6% thereafter. ABC’s last dividend was $1.15 and the required rate of return on similar equity is 12%. Based on the above what should be the share price of ABC today? A) $22.62 B) $26.95 C) $29.63 D) $32.53 E) $50.78