Question 6

Constant Growth Valuation Boehm Incorporated is expected to pay a $3.50 per share dividend at the end of this year (i.e., D1 = $3.50). The dividend is expected to grow at a constant rate of 4% a year. The required rate of return on the stock, r5, is 15%. What is the estimated value per share of Boehm's stock? Round your answer to the nearest cent. $