Required rate of return on abi stock

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Pessimistic Funds believes that ABI's expected return on reinvested funds (ROE) is less than ABI's required rate of return. Assuming no managerial agency conflicts (i.e., management invests in NPV>0 projects only), what is ABI's stock price today? ABI's earnings-per-share in one year (EPS1) is expected to be $8.1 and the required rate of return on ABI's stock is 10% (EAR).

(Answer should be in two decimals)

Reference no: EM132481806

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