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QUESTION 7 Topic: DDM/ payout ratio A firm is expected to have four years of growth with a retention ratio of 100%. Afterwards the firma

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QUESTION 7 Topic: DDM/ payout ratio A firm is expected to have four years of growth with a retention ratio of 100%. Afterwards the firma s dividends are expected to grow 496 annually, and the dividend payout ratio will be set at 50%. If earnings per share (EPS) $2.4 in year 5 and the required return on equity is 10%, what is the stock, s value today? $13.66. $30.00. $20.00

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