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4. (8 points) ZZZ Research projects a return on equity of 30%. Management plans to plow back 30% of all earnings into the firm. Earnings
4. (8 points) ZZZ Research projects a return on equity of 30%. Management plans to plow back 30% of all earnings into the firm. Earnings this year will be $5 per share, and investors expect a 15% rate of return on the stock (r-15%). What is the present value of growth opportunities (PVGO)? Is PVGO positive or negative? Why
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