What is a reasonable price to pay for the security

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Reference no: EM131999252

A student investment club, The Millionaires Club, is considering purchase of a security for the club. The current earnings per share is $.75 and is expected to increase by $.05 each year into the future.

If 30-year government bonds are paying 4.6%, what is a "reasonable" price to pay for the security?

Reference no: EM131999252

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