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A firm expects next year's EPS to be $5.93. Its dividend payout ratio is 0.8 and it will reinvest the remainder of earnings in projects
A firm expects next year's EPS to be $5.93. Its dividend payout ratio is 0.8 and it will reinvest the remainder of earnings in projects with expected return of 12%. The firm will continue this same reinvestment policy indefinitely. If the stock's required rate of return is 10.9%, what is the present value of the firm's growth opportunities? Round your answer to the nearest penny.
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