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Company ABC is known for providing big data solutions for manufacturing companies. ABC is expected to pay a dividend next year of $1, a dividend
Company ABC is known for providing big data solutions for manufacturing companies. ABC is expected to pay a dividend next year of $1, a dividend in year 2 of $2, a dividend in year 3 of $2.5, and a dividend in year 4 of $3. From year 4 onwards, the dividend payout ratio will be 60% every year and ROE is expected to be 15%. The required rate of return for Company ABC is 10%. Based on the information, estimate ABCs intrinsic value using a multistage dividend growth model. Show your calculations.
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