Common stock valueVariable growthNewman Manufacturing is considering a cash purchase of the stock of Grips Tool. During the year justcompleted, Grips earned $4.22 per share and paid cash dividends of $2.52 per share (D0=$2.52). Grips' earnings and dividends are expected to grow at 20% per year for the next 3years, 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 ofGrips?

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

Common stock valueVariable growthPersonal Finance ProblemHome PlaceHotels, Inc., is entering into a3-year remodeling and expansion project. The construction will have a limiting effect on earnings during thattime, but when it iscomplete, it should allow the company to enjoy much improved growth in earnings and dividends. Lastyear, the company paid a dividend of $1.70. It expects zero growth in the next year. In years 2 and3, 3% growth isexpected, and in year4, 15% growth. In year 5 andthereafter, growth should be a constant 11% per year. What is the maximum price per share that an investor who requires a return of 18% should pay for Home Place Hotels commonstock?

The maximum price per share that an investor who requires a return of 18% should pay for Home Place Hotels common stock is $_____________. (Round to the nearestcent.)