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ENN Inc. expects to earn $2 per share in year 1. The company has a policy...

ENN Inc. expects to earn $2 per share in year 1. The company has a policy of retaining 60 percent of its earnings and investing them at a return (R) of 20 percent. Stockholders in EG expect a return (K) of 15 percent on the stock.

                          

  1. What price should ENN’s stock sell for?
  2. What is the premium for growth and the PE ratio
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