Q 14.32. Assume that the prevailing interest rate is 8% per year for value firms and 12%
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Q 14.32. Assume that the prevailing interest rate is 8% per year for value firms and 12% per year for growth firms. A growth firm with earnings of $100,000 has a market value of $100,000,000, while a value firm with earnings of $1,000,000 has a market value of $20,000,000. 1. What are the implicit growth rates? 2. What are the PVGOS?
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