On January 1, 1991, you are considering the purchase of ABC Company's common share. You have collected the following information on ABC Company: 1. Book value for common share on January 1, 1991 is $13 per share. 2. Predicted net income for 1991 is $2 per share and net income is expected to increase by 10% every year through 1995. 3. ABC is expected to pay $0.5 dividends per year from 1991 to 1995. 4. After 1995, abnormal earnings will grow by 5% per year. 5. ABC's beta is 1.2. The risk-free rate of return is 6.6% and the market risk premium is 7%. You should use the CAPM model to estimate the equity cost of capital for ABC Company.

Required: Using the abnormal earnings formula, compute the estimated equity value per share of ABC Company on January 1, 1991. Your answers must show the steps of computations