World Tobacco has issued preferred stock ($10 par value) that pays an annual divi- dend of $0.84. The preferred stock matures in 5 years. At that time, holders of the stock will receive, at their option, either $10 or one share of common stock with a value up to $14. If the common stock is trading at a price above $14, the preferred stockholders will receive a fractional share of common stock worth $14. The currentcommon stock price is $8.875. The common stock pays a 10 cent per share divi- dend. This dividend is expected to grow at a 10 percent rate per year for the next 5 years. If the market requires a 12 percent rate of return on a stock of this risk and maturity, what is the maximum value for which this share can be expected to trade? PO85