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A firm has an ROE of 20%. If the coming year's earnings are expected to be $5 per share, and the company maintains a dividend

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A firm has an ROE of 20%. If the coming year's earnings are expected to be $5 per share, and the company maintains a dividend payout ratio of 40%. The required return for the company is 10%. Assume the company uses the constant growth DDM to estimate the intrinsic value. a. At what price do you think the stock will sell? b. What price do you expect MF shares to sell for in three years

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