Common stock

valueVariable

growthNewman manufacturing is considering a cash purchase of the stock of Grips Tool. During the year just completed, Grips earned

$3.43

per share and paid cash dividends of

$1.73

per share

(D0=$1.73).

Grips' earnings and dividends are expected to grow at

25%

per year for the next 3 years, after which they are expected to grow

6%

per year to infinity. What is the maximum price per share that Newman should pay for Grips if it has a required return of

14%

on investments with risk characteristics similar to those of Grips?

The maximum price per share that Newman should pay for Grips is

$______.(Round to the nearest cent.)