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Stock A has an earnings of $5 per share at year 1. The interest rate is 20%, and the return on equity is 25%. If

Stock A has an earnings of $5 per share at year 1. The interest rate is 20%, and the return on equity is 25%. If there is a plow-back of 40%, what is the stock price at year zero (P0) ?

Select one:

a. $15.00

b. $25.00

c. $30.00

d. $33.00

e. none of the above

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