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3. Calculate the following questions regarding the Dividend Discount Models (DDM): V = D. (1+g) . D k-g k-g a. A company has an ROE

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3. Calculate the following questions regarding the Dividend Discount Models (DDM): V = D. (1+g) . D k-g k-g a. A company has an ROE of 10% and a plowback ratio of 20%. If the coming year's earnings are expected to be $5 per share, at what price will the stock sell? The market capitalization rate is 10%. (15%) b. What price do you expect the company's shares to sell for in five years? (10%) (Underline your final answer, e.g., Ans.: XXXX)

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