3. 34.

Non-constant growth [LO 8.1] Booligal Boot Company just paid a dividend of $3.15 per share. The company will increase its dividend by 20 per cent next year and then reduce its dividend growth rate by 5 percentage points per year until it reaches the industry average of 5 per cent dividend growth, after which the company will keep a constant growth rate forever. If the required return on the company’s shares is 12 per cent, what will a share sell for today?