$10.$ A common way to value the stock of dividend$-$paying firm is to value the

expected dividends over a $3-$year period and then find a $$terminal$$ stock price

using a benchmark PE ratio.

Beatles Exterminating Inc. just paid a dividend of $$1\mathrm{.}75/$share$,$ which is

expected to grow $10\%$ per year over the next three years. In three years, the

estimated payout ratio is $25\%$ and the expected PE ratio is $15.($Recall a firm$$s

payout ratio $=$ per share dividend $/$ EPS$).$ If Beatles Exterminating has a $10\%$

cost of equity capital, what is its stock price today?