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Firm reinvests 60% of its earnings in projects with ROE of 10%, capitalization rate is 15%. Expected year-end dividend is $2/share, paid out of earnings

Firm reinvests 60% of its earnings in projects with ROE of 10%, capitalization rate is 15%. Expected year-end dividend is $2/share, paid out of earnings of $5/share.

Calculate the dividend growth rate.

Calculate the firms intrinsic value.

Calculate the firms present value of growth per share.

Why is the PVGO is negative?

Is the current dividend policy a good choice? What could be done to increase its stock price?

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