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Fast Track Bikes (FTB) paid an annual dividend of $12 at the end of 2021. FTB plans to retain all of its earnings for the next five years. For the subsequent five years, the firm will retain 70% of its earnings. It will then retain 30% of its earnings from that point onward. Retained earnings will be invested in new projects with an expected return of 20% per year for the next 3 years, in new projects with an expected return of 25% for 4 years after that, and in projects with an expected return of 30% per year afterwards. Any earnings that are not retained will be paid out as dividends. Assume FTB’s share count remains constant and all earnings growth comes from the investment of retained earnings. If FTB’s equity cost of capital is 10%, what price would you estimate for FTB’s stock at the end of 2021?

If you are using excel for this question, submit your excel worksheet as well.

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