Problem 8-35 P/E Model and Cash Flow Valuation (LG8-5, LG8-7) Suppose that a firm's recent earnings per share and dividend per share are $4.00 and $3.00, respectively. Both are expected to grow at 8 percent. However, the firm's current Ple ratio of 21 seems high for this growth rate. The P/E ratio is expected to fall to 17 within five years Compute the dividends over the next five years. (Do not round intermediate calculations. Round your answers to 3 decimal places.) Years First year Second year Third year Fourth year Fifth year Dividends $ 3.240 $ 3.499 $ 3.779 $ 4.081 4 408 c. Compute the value of this stock in five years. (Do not round intermediate calculations. Round your answer to 2 decimal places Stock price 123.56 Calculate the present value of these cash flows using a 10 percent discount rate (Do not found intermediate calculations. Round your answer to 2 decimal places.) Prosent value TH Next