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# You expect the dividends per share of Recreational Pharmaceuticals Inc. to be \$2.09 next year, \$2.26 the year after that and \$2.53 the year after...

You expect the dividends per share of Recreational Pharmaceuticals Inc. to be \$2.09 next year, \$2.26 the year after that and \$2.53 the year after that. Currently, the company has a P/E ratio of 15. The 3-month T-Bill, a risk-free asset, is yielding 3.5% annually, the S&P has a return of 14% and the company has a beta of 1.5. Assuming a constant P/E ratio, what is the value of the stock today if you expect EPS to be \$4.90 in three years when you sell it?

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You expect the dividends per share of Recreational Pharmaceuticals Inc. to be \$2.09
next year, \$2.26 the year after that and \$2.53 the year after that. Currently, the
company has a P/E ratio of 15....

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