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Burklin, Inc., has earnings of $18.5 million and is projected togrow at a constant rate of 5 percent forever because of thebenefits gained from the learning curve. Currently, all earningsare paid out as dividends. The company plans to launch a newproject two years from now that would be completely internallyfunded and require 25 percent of the earnings that year. Theproject would start generating revenues one year after the launchof the project and the earnings from the new project in any yearare estimated to be constant at $7 million. The company has 8.3million shares of stock outstanding.    Estimate the value of the stock. The discount rate is 10percent.
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