Common stock value-Variable growth Newman Manufacturing is considering a cash purchase of the stock of...
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Common stock valueVariable growth Newman Manufacturing is considering a cash purchase of the stock of Grips Tool. During the year just completed, Grips earned $ per share and
paid cash dividends of $ per share $ Grips' earnings and dividends are expected to grow at per year for the next years, after which they are expected to grow per year to
infinity. What is the maximum price per share that Newman should pay for Grips if it has a required return of 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.
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