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#1. XYZ Corp has just reported earnings of $20 million, and it plans to retain 75 percent of its earnings. The

company has 1.25 million shares of common stock outstanding. The stock is selling for $60 and the company's ROE is 12% and is expected to stay at that level in the future.

(a) What is the discount rate on the stock?

(b) What is the NPVGO for this company? 

(mostly need help on B)

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