Nonconstant Growth Stock Valuation

Assume that the average firm in your company's industry is expected to grow at a constant rate of 6% and that its dividend yield is 7%. Your company is about as risky as the average firm in the industry and just paid a dividend (D₀) of $3. You expect that the growth rate of dividends will be 50% during the first year (g_0,1 = 50%) and 30% during the second year (g_1,2 = 30%). After Year 2, dividend growth will be constant at 6%. What is the estimated value per share of your firms stock? Do not round intermediate calculations. Round your answer to the nearest cent.

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