Sanders, Incorporated, paid a $5 dividend per share last year and is expected to continue to pay

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Question:

Sanders, Incorporated, paid a $5 dividend per share last year and is expected to continue to pay out 70% of its earnings as dividends for the foreseeable future. If the firm is expected to generate a 14% return on equity in the future, and if you require a 16% return on the stock, the value of the stock is __________.