Forecast Financial information relating to the company is as follows:
Year 1 Earnings ($000)- 3000 Dividends ($000)- nil
Year 2 Earnings ($000)- 3600 Dividends ($000)- 500
Year 3 Earnings ($000)- 4300 Dividends ($000)- 1000 The company is optimistic that earnings and dividends will increase after Year 3 at a constant annual rate of 3% per year.
Calculate the value of the company using the dividend valuation model.