A firm does not pay a dividend. It is expected to pay its first dividend of $0.34 per share in three years. This dividend will grow at 7 percent indefinitely. Use an 8 percent discount rate.

Compute the value of this stock. (Round your answer to 2 decimal places.)

Step 1 ：Calculate the present value of the first dividend using the formula $PV=\frac{D}{(1+r{)}^t}$ where $D$ is the dividend, $r$ is the discount rate, and $t$ is the time until the first dividend

Step 2 ：Substitute the given values into the formula: $PV=\frac{0.34}{(1+0.08{)}^3}$

Step 3 ：Calculate the present value of the first dividend: $PV=\frac{0.34}{(1.08{)}^3}$

Step 4 ：Find the present value of the first dividend: $PV=0.2699029619468577$

Step 5 ：Use the Gordon Growth Model to calculate the value of the stock: $P=\frac{D}{r-g}$ where $P$ is the price of the stock, $D$ is the expected dividend one year from now, $r$ is the discount rate, and $g$ is the growth rate

Step 6 ：Substitute the values into the Gordon Growth Model: $P=\frac{0.34\times (1+0.07)}{0.08-0.07}$

Step 7 ：Calculate the value of the stock: $P=\frac{0.34\times 1.07}{0.01}$

Step 8 ：Find the value of the stock: $P=26.99$

Step 9 ：The value of the stock is $\boxed{{\displaystyle 26.99}}$