Question
Sisters Corp expects to earn $8 per share next year. The firms ROE is 16% and its plowback ratio is 60%. If the firms market
| Sisters Corp expects to earn $8 per share next year. The firms ROE is 16% 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.) |
| PVGO | $ |
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Foundations Of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
11th Canadian Edition
1259024970, 978-1259265921
