Compute the price per share for rerocker

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The ReRocker Corporation is expanding rapidly, but its growth rate is slowing. Its dividend growth rate for the coming year is projected at 15.00%. This rate will decline by 3.00 percentage points per year until it reaches the industry average of 3.00%. Once it reaches 3.00%, it will stay there indefinitely. The most recent dividend was $5.00 per share, and the market requires a return of 10.00% per year on investments such as this one. (To clarify, ReRocker makes a payment once per year and the expected dividend one year from today is $5.75 per share.) Based on this information, compute the price per share for ReRocker.

Reference no: EM131576834

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