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A firm expects next year's EPS to be $8.09. 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 $8.09. Its dividend payout ratio is 0.8 and it will reinvest the remainder of earnings in projects with expected return of 15%. The firm will continue this same reinvestment policy indefinitely. If the stock's required rate of return is 15.0%, what is the present value of the firm's growth opportunities? Round your answer to the nearest penny
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Money And Capital Markets
Authors: Peter Rose, Milton Marquis
10th Edition
0077235800, 9780077235802
