A firms earnings and dividends are expected to grow at a constant rate indefinitely, and it is

Question:

A firm’s earnings and dividends are expected to grow at a constant rate indefinitely, and it is expected to pay a of $8.75 per share next year. Expected EPS and BVPS next year are $12 and $48, respectively. The is 10 percent and there are 10,000 shares outstanding. Calculate the firm’s value, assuming that the retention ratio stays the same and the market value of debt is $500,000.

Cost Of Equity
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