What is the maximum price per share

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Manufacturing is considering a cash purchase of the stock of Grips Tool. During the year just? completed, Grips earned ?$4.13 per share and paid cash dividends of ?$2.43 per share ?(D0=$2.43?). ? Grips' earnings and dividends are expected to grow at 40?% per year for the next 3? years, after which they are expected to grow 8?% per year to infinity. What is the maximum price per share that Newman should pay for Grips if it has a required return of 15?% on investments with risk characteristics similar to those of? Grips?  

The maximum price per share that Newman should pay for Grips is ?$

Reference no: EM132701882

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