Dixie Down has expected earnings after taxes for Year 5 of $385,000 and has 60,000 outstanding shares.The current value of the firm's earnings for the next five years,Years 1 through 5,is $567,000.The comparable PE for the firm is 11.4.What is the estimated value of one share of this stock if the required rate of return is 16 percent?
A) $74.15
B) $77.85
C) $82.60
D) $88.80
E) $90.31
Correct Answer:
Verified
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