Suppose that the consensus forecast of security analysts of your favorite company is that earnings next year will be $5.00 per share. The company plows back 50% of

its earnings and if the Chief Financial Officer (CFO) estimates that the company's return on equity (ROE) is 16%. Assuming the plowback ratio and the ROE are expected

to remain constant forever:

If you believe that the company's required rate of return is 10%, what is your estimate of the price of the company's stock? (The answer is not $31.25)