Fred Tibbits has made a detailed study of the denim clothing industry. He's particularly interested in...

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Fred Tibbits has made a detailed study of the denim clothingindustry. He's particularly interested in a company called DenhartFashions that makes stylish denim apparel for children andteenagers. Fred has done a forecast of Denhart's earnings andlooked at its dividend payment record. He's come to the conclusionthat the firm will pay a dividend of $5.50 for the next two yearsfollowed by a year of $6.50. Fred's investment plan is to buyDenhart now, hold it for three years, and then sell. He thinks theprice will be about $75.00 when he sells. What is the most Fredshould be willing to pay for a share of Denhart if he can earn 14%on investments of similar risk? Round PVF values in intermediatecalcualtions to four decimal places. Round the answer to twodecimal places. Do not round intermediate calculations.

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Fred Tibbits has made a detailed study of the denim clothingindustry. He's particularly interested in a company called DenhartFashions that makes stylish denim apparel for children andteenagers. Fred has done a forecast of Denhart's earnings andlooked at its dividend payment record. He's come to the conclusionthat the firm will pay a dividend of $5.50 for the next two yearsfollowed by a year of $6.50. Fred's investment plan is to buyDenhart now, hold it for three years, and then sell. He thinks theprice will be about $75.00 when he sells. What is the most Fredshould be willing to pay for a share of Denhart if he can earn 14%on investments of similar risk? Round PVF values in intermediatecalcualtions to four decimal places. Round the answer to twodecimal places. Do not round intermediate calculations.