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You want to buy a stock but cannot find its price listed. It is projected...

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Finance

You want to buy a stock but cannot find its price listed. It is projected to pay dividends that grow constantly. Given the risk, other similar stocks are expected to return 27.10%. According to Morningstar, this stock will pay 20% of its next earnings per share, which are projected at $2.50 on a net income of $25,000,000. The balance sheet reports the common stock balance of $105,600,740.

What maximum price would you pay for the stock (rounded to the nearest dollar)?

a) $30

b) $31

c) $22

d) None of the above

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