Common stock value-Variable growth Newman Manufacturing is considering a cash purchase of the stock of Grips Tool. Durin

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Common Stock Value Variable Growth Newman Manufacturing Is Considering A Cash Purchase Of The Stock Of Grips Tool Durin 1 (46.47 KiB) Viewed 67 times

Common stock value-Variable growth Newman Manufacturing is considering a cash purchase of the stock of Grips Tool. During the year just completed, Grips earned $4.09 per share and paid cash dividends of $2.39 per share (Do = $2.39). Grips' earnings and dividends are expected to grow at 40% per year for the next 3 years, after which they are expected to grow 9% per year to infinity. What is the maximum price per share that Newman should pay for Grips if it has a required return of 12% on investments with risk characteristics similar to those of Grips? The maximum price per share that Newman should pay for Grips is $ (Round to the nearest cent.)