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Determine the theoretical price of the shares of a company whose earnings at t = 1 will be 3,375 million euros, and 4,000 million euros
Determine the theoretical price of the shares of a company whose earnings at t = 1 will be 3,375 million euros, and 4,000 million euros at t = 2. From there, your benefits are expected to increase each year at a rate of 7% per year. The rate of Dividend distribution of this company is 80% and will be constant throughout your life. In addition, the number of outstanding shares is 65 million. The risk premium on the risk-free assets of companies in the same sector is 10% and the yield of the German 10-year bond (risk-free asset) of 0.50%. Note: In If you do not get the exact number, mark the answer that is closest to you. a) 1,310.53 b) 1,530.30 c) 4,792.85 d) 1,057.69
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