Consider a firm with existing assets that generate EPS of $12 the firm\'s EPS is

Question

Consider a firm with existing assets that generate EPS of $12 the firm's EPS is expected to remain constant at $12 a year. the firm expects the investment opportunities will not be available until year 3 when the firm will invest $4 annually forever. The investments come from the available earnings in the existing company. Each investment is expected to generate a permanent 15% return. The required rate of return for the firm is 10%
what is the firm's current stock price if the firm takes advantage of the expected investment opportunities?

Explanation / Answer

please recheck, i feel some information are missing like payout ration or retention ratio.

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