Question
Sisters Corp expects to earn $7 per share next year. The firms ROE is 12% and its plowback ratio is 80%. If the firms market
Sisters Corp expects to earn $7 per share next year. The firms ROE is 12% and its plowback ratio is 80%. 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.) PVGO $
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Finance Applications And Theory
Authors: Marcia Cornett, Troy Adair, John Nofsinger
6th Edition
1264101589, 9781264101580
