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Question 1: The following forecasts of earnings per share (EPS) and dividend per share (DPS) were made at the end of 2012. (in dollars) The

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Question 1: The following forecasts of earnings per share (EPS) and dividend per share (DPS) were made at the end of 2012. (in dollars) The firm has an equity cost of capital (cost of equity) of 12% per annum. Requirement 1: Calculate abnormal earnings growth (in dollars) that is forecast for each year, 2014 2017. (12 points) Requirement 2: What is the per-share value of the equity at the end of 2012 based on the abnormal earnings growth valuation model? (13 points)

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