Problem 9-10

Valuation of a declining growth stock

Maxwell Mining Company's ore reserves are being depleted, so its sales are falling. Also, because its pit is getting deeper each year, its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 9% per year. If D0= $6 and rs= 14%, what is the value of Maxwell Mining's stock? Round your answer to two decimal places.