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Investors require a 10% return from Sommers, Inc. The company's return on equity is 16%, and expects to have an earnings...

Investors require a 10% return from Sommers, Inc. The company's return on equity is 16%, and expects to have an earnings per share of $6 next year. The company ususally plowback 60% of its earnings for future growth.

What is the current value of Sommers' stock? (Do not round intermediate calculations.)

Price = ?

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Growth rate ROE*Retension rate 0.16*60% 0.096 9.60% Dividend EPS*(1-plow back rate) 6*(1-0.60) 2.40 Current value Dividend/(r

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