What is maximum price per share

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Common stock value—Variable growth- Newman manufacturing is considering a cash purchase of the stock of Grips Tool. During the year just? completed, Grips earned $4.12 per share and paid cash dividends of ?$2.42 per share ?(D0 equals=$2.42?). Grips' earnings and dividends are expected to grow at 35?% per year for the next 3?years, after which they are expected to grow 6?% per year to infinity. What is the maximum price per share that Newman should pay for Grips if it has a required return of 16?% on investments with risk characteristics similar to those of? Grips?

Round anwser to the nearest cent.

Reference no: EM131849204

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