This problem illustrates how an increase in interest rates, and thus an increase in the discount rate, can significantly affect stock prices.

Suppose that the current share price of Apple common stock is $193. The projected annual dividend for the upcoming year is $4.17 per share. This dividend is set by the board, and it is not expected to change. (Caution: this amount is NOT the most recent dividend, D0. It is the projected dividend in one year, D1.)

Analysts forecast the annual growth rate in dividends will be 10.2%; assume that this growth rate is not affected by interest rate changes.

Suppose that interest rates suddenly rise by 2.8%. Assume that Apple's discount rate rises by the same amount. (For example, if the current discount rate is 8% and interest rates rise by 2%, then the new discount rate will be 8% + 2% = 10%.)

What is the new share price for Apple stock? (Hint: assume that the constant growth rate DDM is valid.)

Express your answer in dollars to two decimal places; do not type the $ symbol. Thus, for example, enter a $123.5782 as 123.58