ABC Corp. has just paid a dividend (D₀) 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 ABCs stock (r_s) is 10.0%.

d. What is the horizon value price of the stock at year 3 (P₃) according to the dividend discount model (DDM)?

e. Use the values you found from parts a-d above to plot the total yearly cash flows in the appropriate spaces on the time line below. These should match the cash flows you would use to compute the present value of the stock under the non-constant growth Dividend discount model (DDM).

Year	1	2	3
Cash Flow

f. What is the intrinsic value of ABC Corp.s stock under the non-constant growth DDM?