A company currently has earnings (E) of $4.50 and a dividend (D.) of $0.45. The firm's current return on equity (ROE) is 50%. 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, 5, and 6 to a growth of 3%. The firm will then grow at 3% to perpetuity. The firm's beta is presently 1.4, 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 6 to perpetuity. What is the present value of this firm's equity using a three-stage model with linear transition in years 3, 4, 5, and 6? $119.46 $111.01 $102.75 $131.85