Question: ABC Corp has a smart home device that opens the back door when your dog scratches at it so he can go outside. Given the

ABC Corp has a smart home device that opens the back door when your dog scratches at it so he can go outside. Given the phenomenal market response to this product, ABC is increasing its dividend. Dividends were $0.50 per share this past year and are expected to grow at a rate of 25% per year until the end of year 1. At that point, other companies are likely to bring out competing products. Analysts project that at the end of year 1, ABC's growth will slow to a long-run rate of 6%. If ABC's equity cost of capital is 12%, what is the value of a share today?

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