Common stock value —Variable growth Personal Finance Problem Home Place​ Hotels, Inc., is entering into a​ 3-year remodeling and expansion project. The construction will have a limiting effect on...

 Personal Finance Problem

 Home Place​ Hotels, Inc., is entering into a​ 3-year remodeling and expansion project. The construction will have a limiting effect on earnings during that​ time, but when it is​ complete, it should allow the company to enjoy much improved growth in earnings and dividends. Last​ year, the company paid a dividend of
​$1.80.

It expects zero growth in the next year. In years 2 and​ 3,
3​%
growth is​ expected, and in year​ 4,
16​%
growth. In year 5 and​ thereafter, growth should be a constant
9​%
per year.

What is the maximum price per share that an investor who requires a return of
16​%
should pay for Home Place Hotels common​ stock?