7.06.2

Nonconstant Dividend Growth Valuation A company currently pays a dividend of $1.4 per share (D0=$1.4). It is estimated that the company's dividend will grow at a rate of 18% per year for the next 2 years, and then at a constant rate of 8% thereafter. The company's stock has a beta of 1.4 , the risk-free rate is 9%, and the market risk premium is 5.5%. What is your estimate of the stock's current price? Do not round intermediate calculations. Round your answer to the nearest cent