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Laurel Enterprises expects earnings next year of
$3.79
per share and has a
50%
retention rate, which it plans to keep constant. Its equity cost of capital is
11%,
which is also its expected return on new investment. Its earnings are expected to grow forever at a rate of
5.5%
per year. If its next dividend is due in one year, what do you estimate the firm's current stock price to be?
The current stock price will be
$nothing.
(Round to the nearest cent.)
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