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Would be thankful if anyone could break down how to approach this. Thank you! ABC's assets in place have just generated an annual EPS of

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Would be thankful if anyone could break down how to approach this. Thank you!

ABC's assets in place have just generated an annual EPS of $10. If ABC does not make new in- vestments in real assets (but only reinvests to maintain existing assets), EPS is expected to be con- stant in the future. In each of the next 4 years ABC has the option to invest $4 per share. Each in- vestment is expected to give a permanent 20 percent annual return. Assume the relevant cost of cap- ital is 10 percent. Calculate ABC's stock price

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