20

Kroger Inc. paid a $3 dividend on December 31, 2020. Kroger dividends are expected to grow at a rate of 12% per year in the next five years; then it is expected to decline from 12% to 3% over the next 5 years; from year 10 to 11 and after that, Kroger's dividends will grow at a perpetual rate of 3%. Kroger's cost of equity is 7%. Use the variable growth dividend discount model to estimate the fair value of Kroger stock based on the expectations above?

36.50

142.16

95.13

131.63

Please show work in Excel with Excel formulas, thanks