culate the intrinsic value of ABC Corp using a threedividend model assuming: - The current dividend is $5 per share and the current payout ratio is 25% starting next year the company will increase the payout ratio by 10% per year (ex. from 25 to 35% ) for the next 3 years. - The earnings per share is expected to grow 25% per year for the next 3 years - The earnings per share is expected to grow 15% for yrs 4-6 (the payout ratio will not change from year 3. The earnings per share in year 7 and beyond is expected to grow at a constant rate of 4% The required rate of return is 10% NOTE Dividend per shares = Earnings per share X Payout Ratio Payout Ratio = The amount of earnings that a company pays out in dividends