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Business, 09.10.2019 17:10 gbprulesmile

Newman manufacturing is considering a cash purchase of the stock of grips tool. during the year just completed, grips earned $4.25 per share and paid cash dividends of $2.55 per share (d0 = $2.55). grips’ earnings and dividends are expected to grow at 25% per year for the next 3 years, after which they are expected to grow at 10% per year to infinity. what is the maximum price per share that newman should pay for grips if it has a required return of 15% on investments with risk characteristic

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