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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 book value of equity per share at the beginning of year 6 ?
a. $20.00
b. $21.00
c. $22.00
d. $23.00
e. none of the above
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