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ABC Corp. currently has an EPS of $4.50, and the benchmark PE for the company is...

ABC Corp. currently has an EPS of $4.50, and the benchmark PE for the company is 15. The company paid $2.50 for a dividend yesterday. Earnings and dividends are expected to grow at 6% for the next year.

(a) What is the estimation of current stock price?

(b) What is the target stock price in one year?

(c) What is the (implied) required rate of return on the company’s stock over the next year?

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