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36. ME Corp has an ROE of 16%. If the coming year's eamings are expected to be 52 per share, and the company maintains a
36. ME Corp has an ROE of 16%. If the coming year's eamings are expected to be 52 per share, and the company maintains a dividend payout ratio of 30%. The required return for the company is 12%. Assume the company uses the constant growth DDM to estimate the intrinsic value. At what price do you think the stock will sell? (3 points) What price do you expect MF shares to sell for in three years? (3 points)
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