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Laurel Enterprises expects earnings next year of $3.79 per share and has a 50% retention...

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Question

Finance

Laurel Enterprises expects earnings next year of

$3.79

per share and has a

50%

retention rate, which it plans to keep constant. Its equity cost of capital is

11%,

which is also its expected return on new investment. Its earnings are expected to grow forever at a rate of

5.5%

per year. If its next dividend is due in one year, what do you estimate the firm's current stock price to be?

The current stock price will be

$nothing.

(Round to the nearest cent.)

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