Suppose that a firms recent earnings per share and dividend per share are $2.75 and $1.80, respectively. Both are expected to grow at 10 percent. However, the firms current P/E ratio of 19 seems high for this growth rate. The P/E ratio is expected to fall to 15 within five years.

Compute the dividends over the next five years. (Do not round intermediate calculations. Round your answers to 3 decimal places.)

Compute the value of this stock price in five years. (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Calculate the present value of these cash flows using a 12 percent discount rate. (Do not round intermediate calculations. Round your answer to 2 decimal places.)