8.8

A company had $16 of sales per share for the year that fust ended, You expect the company to grow their sales at 6.5 percent for the next five years. After that, you expect the company to grow 3.75 percent in perpetuity. The compary has a 14 percent ROE and you expect that to continue forevec The compary's net margins are 5 percent and the cost of equity is 9 percent. Use the free cash fow to equity model to value this stock. Do not round intermediate calculations, Round your answer to the nearest cent. 5