Joe Plumbing can currently generate EPS of 3 per year forever by just maintaining current operations. Shareholders need to earn 15%. Joe pays all the...

Joe Plumbing can currently generate EPS of 3 per year forever by just maintaining current operations. Shareholders need to earn 15%. Joe pays all the EPS as a dividend. Joe has found a machine for sale that should earn a 16% return on investment. He hesitates to buy it, because he would have to retain 50% of the EPS to buy and run it, thus cutting his dividend. Calculate (and show) the numbers that can help Joe decide what he should do, then tell him