Discount rate applied to its stock

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Finance question: Ed's Bait Shoppe had earnings this year of $5,000,000. From this it paid out $3,000,000 in dividends. This payout is representative of its typical dividend policy. You think Ed's earnings will grow at 4% annually. This discount rate applied to its stock is 15%. How much would you be willing to pay for a share if there are 15 million shares outstanding?

Reference no: EM131757057

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