SOSU, Inc has before tax income this year is $900,000. The company’s payout ratio is 40%. The company's common equity currently has a book value of $5,000,000. They just paid a dividend of $1.87, and the required rate of return on this stock is 10%. Compute the value of this stock if dividends are expected to continue growing indefinitely at the company's internal growth rate. Tax rate = 28%.
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