A stock will pay no dividends for the next 3 years.  Four years from now, the stock is expected to pay its first dividend in the amount of $2.4.  It is expected to pay a dividend of $2.9 exactly five years from now.  The dividend is expected to grow at a rate of 6% per year forever after that point.  The required return on the stock is 15%.  The stock's estimated price per share exactly TWO years from now, P2 , should be $______. Do not round any intermediate work, but round your final answer to 2 decimal places (ex: $12.34567 should be entered as 12.35).

Question

A stock will pay no dividends for the next 3 years.  Four years from now, the stock is expected to pay its first dividend in the amount of $2.4.  It is expected to pay a dividend of $2.9 exactly five years from now.  The dividend is expected to grow at a rate of 6% per year forever after that point.  The required return on the stock is 15%.  The stock's estimated price per share exactly TWO years from now, P2 , should be $______.

Do not round any intermediate work, but round your final answer to 2 decimal places (ex: $12.34567 should be entered as 12.35).

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