XYZ Cоrp hаs а dividend pаyоut ratiо of 35% and retention ratio of 65%. Its return on equity is 8% and cost of equity capital is 10%. It expects the payout ratio to remain stable. The EPS last year was $12. (a) Calculate the target price of the stock, (b) if the current stock price is $85 what is your investment recommendation? Show all work.