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A company is expected to have earnings of $3.37 per share nextyear, $4.65 in two years, and $5.23 in three years. The dividendpayout ratio is expected to remain at 20% over the next threeyears. You estimate the risk-free rate to be 4% per year and theexpected market risk premium to be 5% per year. In two years, youexpect the leading PE ratio to be 11. The beta of the stock is 1.1.What would be an appropriate estimate of the stock price today?(Answer to the nearest penny, i.e. 55.55 but do not use a $sign).
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