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?

Can someone show me how to work this out?