23 3.33334 poin e. How much will the firm save or lose each year in interest if the existing bonds are called and reissued at the new interest rate? You may ignore any costs involved in calling/re-issuing the bonds. QUESTION 24 3. Stock Valuation: Dividend Discount Model (DDM) ABC Corp. has just paid a dividend (Do) of $5.00. Management expects that dividends will grow by 20% this upcoming year, 15% in the second year, 10% in the third year, and grow constantly at 5% thereafter. The required rate of return on ABC's stock (rs) is 10.0%. a. What will be the expected dividend payment next year (D1)? b. What will be the expected dividend payment at the end of year 2 (D2)? b. What will be the expected dividend payment at the end of year 3 (D3)? QUESTION 25 d. What is the horizon value price of the stock at year 3 (P3) according to the dividend discount model (DDM)