You believe the Gordon (constant) growth model is appropriate to value the stock of Reliable Electric Corp. The company had an EPS of $ 2 in 2008. The retention ratio is 0.60. The company is expected to earn a ROE of 14 percent on its investments and the required rate of return is 11 percent. Assume that all dividends are paid at the end of the year.

A. Estimate the value of the companys stock at the beginning of 2009.