A company currently has earnings (E₀) of $2.00 and a dividend (D₀) of $0.50. The firms current return on equity (ROE) is 30%. The firm will maintain the same dividend payout and ROE over the next two periods. Then it will transition in a linear reduction in years 3, 4, and 5 to a growth of 3%. The firm will then grow at 3% to perpetuity. The firms beta is presently 1.6, but this will transition to 1 over the same period. The risk-free rate is 4% and the market risk premium is 6%. ROE is expected to be 10% beginning in year 5 to perpetuity. What is the present value of this firms equity using a three-stage model with linear transition in years 3, 4, and 5?

	0	1	2	3	4	5	6
Earnings Growth Rate	0.225	0.225	0.225	0.16	0.095	0.03	0.03
EPS	2	2.45	3.00125	3.48145	3.812188	3.926553	4.04435
Div Payout (DPS/EPS)	0.25	0.25	0.25
DPS	0.5	0.6125	0.750313
Ke	0.136	0.136	0.136	0.124	0.112	0.1	0.1
PV Cashflows		0.539173	0.581414

I need to find DPS: D3, D4, D5, D6.

For D1 and D2, it was the normal formula. IE; D1: D0(1+g1) ; D2: D1(1+g2)