Problem $8-8$ Value of Dividends and Future Price $($LG$8-5)$

A firm is expected to pay a dividend of $$1\mathrm{.}25$ next year and $$1\mathrm{.}40$ the following year. Financial analysts believe the stock will be at their price target of $$35$ in two years.

Compute the value of this stock with a required return of $11\mathrm{.}2$ percent.

Note: Do not round intermediate calculations. Round your answer to $2$ decimal places.

Value of stock