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GenTrack, Inc. has consistently paid dividends on its common shares as of December 31 of each year. Over the past ten years, the dividend paid

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GenTrack, Inc. has consistently paid dividends on its common shares as of December 31 of each year. Over the past ten years, the dividend paid by the firm has varied between $ 0.65 in December 2009 and $ 1.69 in December 2019. The director of the firm anticipates that dividend growth will maintain its historical average trend for at least eight (8) years (until the beginning of the year 2028). He today declared his firm's intention to reinvest all profits between 2028 and 2034 in order to fund a strategic expansion project. In 2035, GenTrack, Inc. will be required to report earnings per share of $ 4. According to forecasts from GenTrack, Inc., this profit will see an annual and perpetual growth of 6% GenTrack. Inc. does not plan to launch any new share issuance. The rate of return required by shareholders is 15%. The firm's planned payout rate is 50% from 2035. A-If the market is in equilibrium, at what price should GenTrack, Inc. common stock trade today? B-Outside of equilibrium conditions, if the stock trades today (January 1, 2020) at $ 18, say if it is under or over valued. Comment GenTrack, Inc. has consistently paid dividends on its common shares as of December 31 of each year. Over the past ten years, the dividend paid by the firm has varied between $ 0.65 in December 2009 and $ 1.69 in December 2019. The director of the firm anticipates that dividend growth will maintain its historical average trend for at least eight (8) years (until the beginning of the year 2028). He today declared his firm's intention to reinvest all profits between 2028 and 2034 in order to fund a strategic expansion project. In 2035, GenTrack, Inc. will be required to report earnings per share of $ 4. According to forecasts from GenTrack, Inc., this profit will see an annual and perpetual growth of 6% GenTrack. Inc. does not plan to launch any new share issuance. The rate of return required by shareholders is 15%. The firm's planned payout rate is 50% from 2035. A-If the market is in equilibrium, at what price should GenTrack, Inc. common stock trade today? B-Outside of equilibrium conditions, if the stock trades today (January 1, 2020) at $ 18, say if it is under or over valued. Comment

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