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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 ​$2.40. It expects zero growth in the next year. In years 2 and​ 3,
5​% growth is​ expected, and in year​ 4, 19​% growth. In year 5 and​ thereafter, growth should be a constant 11​% 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?


Can you help me? I've followed the online tutorials through my textbook and nothing seems to make sense.

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