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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 no plow-back, what is the dividend per share at year 0 (DIV0) ?

a. $5.00

b. $4.00

c. $3.00

d. $2.00

e. none of the above

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