Suppose that a firms recent earnings per share and dividend per share are $2.10 and $1.10, respectively. Both are expected to grow at 9 percent. However, the firms current P/E ratio of 20 seems high for this growth rate. The P/E ratio is expected to fall to 16 within five years. Compute the dividends over the next five years. (Do not round intermediate calculations. Round your final answer to 3 decimal places.)

Dividends Years

First year $

Second year $

Third year $

Fourth year $

Fifth year $

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

Stock price

$

Calculate the present value of these cash flows using an 11 percent discount rate. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Present value

$