anonymous

You want to buy a stock but cannot find its price listed. It is projected to pay dividends that grow constantly. Given its risk, other similar stocks are expected to return 27.10%. According to Morningstar, this stock will pay 20% of its next earnings per share, which are projected at $2.50 on a Net Income of $25,000,000. The Balance Sheet reports the Common Stock balance of $105,600,740. 1. What is the company's plowback ratio? 2. What is the projected amount of the company's return on equity? 3. What should be the company's constant growth rate? 4. What maximum price would you pay for the stock (rounded to the nearest dollar)