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Ramo Co. recently earned a profit of 3.20 earnings per share and has a P/E ratio of 10.5. The dividend has been growing at a
Ramo Co. recently earned a profit of 3.20 earnings per share and has a P/E ratio of 10.5. The dividend has been growing at a 5 percent rate over the past few years. If this growth rate continues, what would be the stock price in five years if the P/E ratio remained unchanged? What would the price be if the P/E ratio declined to 9 in five years? Show the formula for full marks.
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