2. EFS Corporation, a small, private company in the grocery business, expects to pay out its first dividend next year in the amount of $2.50 per share. Based upon current cash flow projections, management has indicated that they plan to increase the annual dividend per share by 20% for the following 3 years (years 2-4) after that first dividend of $2.50 and then increase it by 5% every year thereafter starting in year 5.

   An analyst is estimating the value of EFS using the multi-stage dividend discount model. The discount rate to be used in the analysis is being estimated using a build-up approach. The analyst chooses to use a market (equity) risk premium of 5%. In addition, the analyst believes a size premium of 4% and a company-specific risk premium of 5% are also warranted to compensate for EFS being a small firm and the fact that that EFS is a highly, undiversified private firm. The risk-free rate is 3%.

   What is the per-share intrinsic value of EFS using the multi-stage (two-stage) dividend discount model?