Question: 1. Use information below for the problem. Year 0 1 2 Expected earnings per share (EPS) Expected dividend per share (DPS) Book value of equity

1. Use information below for the problem. Year 0 1 2

1. Use information below for the problem. Year 0 1 2 Expected earnings per share (EPS) Expected dividend per share (DPS) Book value of equity per share (BPS) $20 $3.00 $1.50 $4.00 $2.00 Assume that the residual earnings grow at a constant rate of 6 percent a year forever after year 2. The required return on equity (or cost of equity) is 12 percent. Find the value of the stock

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