Question
Sisters Corp expects to earn $4 per share next year. The firms ROE is 15% and its plowback ratio is 60%. If the firms market
Sisters Corp expects to earn $4 per share next year. The firms ROE is 15% and its plowback ratio is 60%. If the firms market capitalization rate is 10%.
| a. | Calculate the price with the constant dividend growth model. (Do not round intermediate calculations.) |
| Price | $ |
| b. | Calculate the price with no growth. |
| Price | $ |
| c. | What is the present value of its growth opportunities? (Do not round intermediate calculations.) |
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Handbook Of The Economics Of Finance Corporate Finance Volume 1A
Authors: George M. Constantinides, M. Harris, Rene M. Stulz
1st Edition
0444513620, 978-0444513625
