A recent medical study found significant health benefits


A recent medical study found significant health benefits for those who drink red wine. Gallo Vineyards Inc. expects strong consumer response to this study and projects growth the next 3 years of40% per year. From that point on, Gallo will grow at a rate of 5%. The most recent annual dividend (D0), which was paid yesterday, was $1 per share. If the growth in dividends matches the company's overall growth rate and if stockholders require a 10% return on Gallo's stock, what is the current share price?

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Financial Management: A recent medical study found significant health benefits
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