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When a stock is going through a period of nonconstant growth for tperiods, followed by...

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Accounting

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When a stock is going through a period of nonconstant growth for tperiods, followed by constant growth foreves, the residual income model can be modified as follows: P0=t1T(1+k)tEP1+B4B4+(1+k)TB2 where: Afrs infrared Sindwich Company had a book value of $19.00 ot the beginning of the year, and the earnings per share for the past yeat was $9.65. Molly Millet, a research analyst at Miler, Moore \& Assoclates, estimates that the book value and earnings per share wili grow at 2100 and 19.50 peicent per year for the next four years, respectively. After four years, the growth rate is erpected to be 6 percent. Molly believes the jequired return for the company is 1160 percent. What is the value per share for A/s infrared Sandwich Company? Note: Do not round intermediate calculations. Round your answer to 2 decimal places

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