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A company currently has $3.50 earnings per share of which $1.05 is paid in annual dividends per share. If the growth rate for the firm
A company currently has $3.50 earnings per share of which $1.05 is paid in annual dividends per share. If the growth rate for the firm is 4% per year and the required return is 9%, what is the theoretical P/E ratio?
A: 5.71
B: 6.00
C: 6.24
D: 6.66
E: 7.00
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