Question: 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

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 $3.67 per share and

paid cash dividends of $1.97 per share (D, = $1.97). Grips' earnings and dividends are expected to grow at 25% per year for the next 3 years, after which they are expected to grow 9% per year to

infinity. What is the maximum price per share that Newman should pay for Grips if it has a required return of 14% on investments with risk characteristics similar to those of Grips?

The maximum price per share that Newman should pay for Grips is $. (Round to the nearest cent.)

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