You're thinking about buying some stock in Affiliated Computer Corporation and want to use the P/E approach to value the shares. You've estimated that next year's earnings should come in at about $4.19 a share. In addition, although the stock normally trades at a relative P/E of 1.19 times the market, you believe that the relative P/E will rise to 1.25, whereas the market P/E should be around 20.5 times earnings. Given this information, what is the maximum price you should be willing to pay for this stock? If you buy this stock today at $97.56, what rate of return will you earn if the price of the stock rises to your valuation? (Assume that the stock doesn't pay any dividends.)

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Part 1

The maximum price you should be willing to pay for this stock is?

(Round to the nearest cent.)