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This year’s sales for XYZ Co. were $22 million. Sales are expected to increase by 5%...

This year’s sales for XYZ Co. were $22 million. Sales are expected to

increase by 5% next year. Historically, the firm’s net profit margin has been

7% and its P/E at 15. The firm maintains a 25% dividend payout ratio. The

stock is currently at $112 and there are 165,000 shares outstanding.

Calculate the expected EPS, DPS and stock price for next year. If you

bought the stock today and sold it one year at the expected price, calculate

your HPR.

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