Hi! I am unsure how to answer A.

Surf & Turf Hotels is a mature business, although it pays no cash dividends. Next years earnings are forecast at $68 million. There are 10 million outstanding shares. The company has traditionally used 50% of earnings to repurchase shares of stock and has reinvested the remaining earnings. With reinvestment, the company has generated steady growth averaging 5% per year. Assume the cost of equity is 10%.

a. Calculate Surf & Turfs current stock price. (Do not round intermediate calculations. Round your answer to 2 decimal places.)