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Satay Motors, Inc. has expected EPS of $4.50, $6.25, $7.75 for the next three years, respectively....

Satay Motors, Inc. has expected EPS of $4.50, $6.25, $7.75 for the next three years, respectively. Analysts expect that Satay will pay out 20% of EPS as dividends in years 1, 2 and 3. Satay is then expected to pay a liquidating dividend (an amount over and above the regular dividend of 20% of EPS) of $42.80 in year 3 (this is a liquidating dividend; analysts expect Satay will cease operations after Year 3). Satay's current book value is $28.00 per share, and its required rate of return on equity is 14 percent. Estimate the stock's value using the residual income model equation.

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