It is now December 6, 2022, Ace Engineering, of Oakland, California has just developed a solar panel capable of generating 230% more electricity than any solar panel currently on the global market. As a result, the firm is expected to experience a 35% annual growth for the next five years. By the end of five years other firms will have developed comparable technology, and Ace's growth rate will slow to 6% per year indefinitely. Stockholders require a return of 10% on the firm's stock. The most recent annual dividend D0, which was paid yesterday, was $2.50 per share.

a. Calculate the expected dividends for 2022 through 2027.

b. Calculate the value of the stock today. Assume that the stock is traded at the NASDAQ with a price of $120. Is this stock Overvalued/Undervalued?

c. Calculate the Dividend Yield and the Capital Gains Yield.

d. How does this model differ from the TWO STAGE Model that we have learned in class? Comment analytically.