The Horton Company's last dividend was $1.40 (Do). Its dividend growth rate is expected to be constant at 20% for 2 years, after which dividends are expected to grow at a rate of 6% forever. Its required return (r_s) is 10%.

1. Find horizon value. Briefly explain how you got the answer.
2. What is the best estimate of the current stock price? Explain your logic.
3. If the market price of Horton Co is $27.00 per share is the stock over- or undervalued? Why do you think so?