The Central Heating Company paid common stock dividend of $2.25 in 2016, $2.50 in 2017, $2.65 in 2018, and its most recent dividend was $2.85. The company expects no dividend growth in this year due to the corona pandemic. However, it expects a 15% dividend growth over 2019 dividend in years 2021 and 2022, then 10% growth in 2023. Starting in year 2024, the company wishes to continue constant dividend growth indefinitely. What is the value of the company's stock if the required rate of return is 12 percent? Will you buy the share of the central heating company if it sells for $40 in the market?*

Hint: To find constant growth rate, use the historical dividends that are paid.