A company currently pays no dividends. The company is expected to have earnings per share of $1.40 next year with annual earnings growth of 4%. The current book value per share is $11.90. If the required return on the stock is 15 percent, what is the price of the stock today?
A) $8.40
B) $7.18
C) $7.43
D) $8.00
E) $6.97
Correct Answer:
Verified
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