Residual Income Valuation - ABC Corp.

ABC Corp. is currently trading at $50 per share. The company has reported a book value of equity at the end of the last fiscal year of $30 per share. Analysts expect ABC Corp. to generate a return on equity (ROE) of 12% over the next five years, with a long-term growth rate of 4% thereafter. Assume that ABC Corp.'s cost of equity is 10%.

Given this information, what is the estimated value of ABC Corp. using the Residual Income Valuation (RIV) model?