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b. After year 5, Dexia expects to be a mature bank, growing 3% a year in perpetuity, while continuing to earn the return on equity

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b. After year 5, Dexia expects to be a mature bank, growing 3% a year in perpetuity, while continuing to earn the return on equity that it had at the end of year 5. If the cost of equity for mature banks is 9%, estimate the value of equity at the end of year 5. (2 points)

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