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Los Pollos Hermanos is a public company that is expected to pay out 1 0 % of its earnings per share as dividends over the
Los Pollos Hermanos is a public company that is expected to pay out of its earnings per share as dividends over the next years. The other of the earnings will be invested in opening new locations of its chain restaurant. Due to this growth, you expect Los Pollos Hermanos's EPS to be $$$ and $ in the next four years. After years, you expect Los Pollos Hermanos to slow down expansion and thus begin paying out of earning as dividends. The remaining will be invested in opening stores that earn a return. Thus, Los Pollos Hermanos's EPS will grow at a rate of Investors in tech stocks as risky as Los Pollos Hermanos expect to earn a rate of return.
a What do you expect the price of Los Pollos Hermanos's stock to be years from today?
b What dividends will be paid over the next years?
c What do you expect the price of Los Pollos Hermanos's stock to be today?
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