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A B 1 EPS $2.50 2 payout ratio 55% 3 Required rate of return 12% 4 ROE 17.00% 5 Growth Rate 7.65% 6 Value of
| A | B | |
| 1 | EPS | $2.50 |
| 2 | payout ratio | 55% |
| 3 | Required rate of return | 12% |
| 4 | ROE | 17.00% |
| 5 | Growth Rate | 7.65% |
| 6 | Value of stock |
What is the correct formula to determine the stock price using the earnings model on cell B6? please explain.
a. =B1*B2/B3+(B1*B2*(B4/B3-1))/(B3-B5)
b. =B1/B3-(B1*(1+B2)*(B4/B3+1))/(B3+B5)
c. =B1/B3+B1*(1-B2*B4/B3-1)/(B3-B5)
d. =B1/B3+(B1*(1-B2)*(B4/B3-1))/(B3-B5)
e. =B1/B3+(B1*(1-B3)*(B2/B3-1))/(B3-B4)
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