Suppose that a firms recent earnings per share and dividend per share are $3.80 and $2.80, 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 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 a 12 percent discount rate. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)

Present value

$