A company currently has earnings (E0) of $3.00 and a dividend (D0) of $1.25.

The firm's current return on equity (ROE) is 40%. 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 2%. The firm will then

grow at 2% 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 5% beginning in year 5 to perpetuity. What is the

present value of this firm's equity using a three-stage model with linear transition

in years 3, 4, and 5?Please show all formulas