7.13

Nonconstant Dividend Growth Valuation Assume that the average firm in C\&J Corporation's industry is expected to grow at a constant rate of 5% and that its dividend yield is 8%.C8J is about as risky as the average firm in the industry and just paid a dividend (D0) of $2.75. Analysts expect that the growth rate of dividends will be 50% during the first year (g0,1=50%) and 30% during the second year (g1,2= 30% ). After Year 2, dividend growth will be constant at 5%. What is the required rate of return on C\&J's stock? Do not round intermediate calculations. Round your answer to the nearest whole number. % What is the estimated intrinsic price per share? Do not round intermediate calculations. Round your answer to the nearest cent