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Linda then wants John to evaluate the strength of the business (using the techniques in slide 22) but realizes John will learn about that in
Linda then wants John to evaluate the strength of the business (using the techniques in slide 22) but realizes John will learn about that in week 6 Chapter 17. So instead Linda asks John to use the dividend discount model to evaluate. Using a discount rate of 25% to account for the firms excessive leverage ratio and assuming the company can grow at its current growth rate indefinitely, what do you think the intrinsic value is today?
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