Common stock

valueVariable

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

$3.93

per share and paid cash dividends of

$2.23

per share

(D0=$2.23).

Grips' earnings and dividends are expected to grow at

35%

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

8%

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

16%

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.)