Problem 8-08

A company had $21 of sales per share for the year that just ended. You expect the company to grow their sales at 6 percent for the next five years. After that, you expect the company to grow 3.25 percent in perpetuity. The company has a 13 percent ROE and you expect that to continue forever. The company's net margins are 5 percent and the cost of equity is 8 percent. Use the free cash flow to equity model to value this stock. Do not round intermediate calculations. Round your answer to the nearest cent.