Question
Consider a firm that pays no dividends. Next years earnings are projected to be $1,500,000. The present value of growth opportunities is estimated to be
Consider a firm that pays no dividends. Next years earnings are projected to be $1,500,000. The present value of growth opportunities is estimated to be $13,500,000. Suppose that there are 250,000 shares outstanding. If investors require a return of 12 percent, what is the fair value of the companys stock (Find the price per share)? (8 points)
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Intermediate Financial Management
Authors: Eugene F. Brigham, Phillip R. Daves
13th Edition
1337395080, 9781337395083
