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You know the following concerning a common stock : EPS $3.00 Payout ratio 25% P/E 10 Annual rate of growth of earning and dividends 6%

You know the following concerning a common stock :

EPS $3.00

Payout ratio 25%

P/E 10

Annual rate of growth of earning and dividends 6%

If you want to earn 10 percent, should you buy this stock? What is the maximum price you should be willing to pay for the stock?

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