Mike is analyzing the value of Tata Chemicals Ltd. (Bombay Stock Exchange: TATACHEM). Tata Chemicals is Indias leading manufacturer of inorganic chemicals, and also manufactures fertilizers and food additives. Mike has concluded that the DDM is appropriate to value Tata Chemicals.

During the last five years (fiscal year ending 31 March 2014 to fiscal year ending 31 March 2018), the company has paid dividends per share (in dollars) 5.50, 6.50, 7.00, 8.00, and 9.00, respectively. These dividends suggest an average annual growth rate in DPS of just above 13 percent. Mike has decided to use a three-stage DDM with a linearly declining growth rate in Stage 2. He considers Tata Chemicals to be an average growth company, and estimates Stage 1 (the growth stage) to be 6 years and Stage 2 (the transition stage) to be ten years. He estimates the growth rate to be 14 percent in Stage 1 and 10 percent in Stage 3. Mike has estimated the required return on equity for Tata Chemicals to be 16 percent. Estimate the current value of the stock.