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(Payout policy problem) XYZ Corp just had earnings (t = 0) of $1.25. The company has a constant retention rate of 25%. Additionally, its return

(Payout policy problem) XYZ Corp just had earnings (t = 0) of $1.25. The company has a constant retention rate of 25%. Additionally, its return on new investments is 22%. If the XYZ's relevant cost of equity capital is 9%, what is XYZ's current stock price?

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$28.26

or

$29.51

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