Problem 8-35 P/E Model and Cash Flow Valuation (LG8-5, LG8-7) years. , Suppose that a firm's recent earnings per share and dividend per share are $2.50 and $1.30, respectively. Both are expected to grow at 8 percent. However, the firm's current P/E ratio of 22 seems high for this growth rate. The P/E ratio is expected to fall to 18 within five Compute the dividends over the next five years. (Do not round intermediote calculations. Round your answers to 3 decimal places.) First year Second year Third year Fourth yea Fith year Compute the value of this stock in five years (Do not round intermedinte caleulations. Round your answer to 2 decimal places.) Calculate the present value of these cash lows using a 10 percent discount rate (Do not round intermediate calculetions. Round your answer to 2 decimal pleces)