What would be the price earning ratio

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Question - Diry Industries is considering expanding into a new product line. Earnings per share are expected to be $5 in the current year and are expected to grow annually at 7% if the new product line is introduced. The dividend payout ratio is 80%. If Diry's equity cost of capital is 12%, what would be the company's stock price if they introduce the new product line? What would be the price earning ratio?

Reference no: EM132744060

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