The Boulder Brass Works Company (BBWC) is a small-capitalization machine shop that has found a rapidly growing niche market for its custom-machined brass parts. Its business is growing so fast that it has decided not to pay a dividend next year.

However, in year 2 it expects its growth to decelerate and so plans to begin paying dividends at that time. At the end of year 2 it plans to pay a dividend of $5.00. At the end of year 3 it plays to pay a dividend of $15.00.

Beginning in year 4, BBWC's management believes that the company will have entered its middle age.

Management anticipates being able to sustain a dividend growth rate of 3% per year in year 4 and every year thereafter.

Firms with similar growth and risk characteristics return 18% per year to their equity investors.

What is BBWC's intrinsic value?