Home PlaceHotels, Inc. , is entering into a3-year remodeling and expansion project. The construction will have a limiting effect on earnings during thattime, but when it is complete, it should allow the company to enjoy much improved growth in earnings and dividends. Lastyear, the company paid a dividend of $4.40.

It expects zero growth in the next year. In years 2 and3, 5%growth isexpected, and in year4 16% growth. In year 5 andthereafter, growth should be a constant 11%

per year. What is the maximum price per share that an investor who requires a return of 16%

should pay for Home Place Hotels commonstock?