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Explain equity valuation and your expectation of the IPO price of your company. Your company currently pays a $ 1 . 5 0 dividend per

Explain equity valuation and your expectation of the IPO price of your company. Your company currently pays a $

1.50

dividend per quarter, has an ROE of

10 %,

and has EPS of $

10

per year. An appropriate discount rate is about

7 % .

Use the DDM to calculate the expected IPO price.

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