One year from today, investors anticipate that Spirit Ltd. shares will pay a dividend of $3 per share. After that, investors believe that the dividends will grow at 18% per year for three years before settling down to a constant rate of 8% indefinitely. The required rate of return on Spirits shares is 15%. What is the current value of the share? Show workings.

If the market price of the share is $50, is the share over-priced, under-priced or fairly priced. Explain your answer. (5 Marks)