(Answered) Xyz company to have earnings of 320 per share during the

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XYZ company to have earnings of $3.20 per share during the fiscal year ending in one year on September 21, 2019. The firm currently plans to retain 90 percent of earnings at the end of each of the next three fiscal years (ending on September 21 of 2019, 2020 and 2021). During this three-year period, the Chief Financial Officer projects that the rate of return on equity (ROE) for the firm's new investments will be 27.7778 percent. During the fiscal year ending on September 21, 2022, the firm plans to respond to a decline in the ROE for new investment to 15 percent by reducing the firm's retention rate to 60 percent. The CFO is confident that the firm will be able to maintain this reduced payout ratio and ROE on new investment forever. Assuming the firm's cost of equity capital is 14 percent, determine the current stock price for XYZ.

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