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Stock C has just paid dividend of $1 per share based on payout ratio of 40%. The analyst expects its return on equity (i.e. ROE)
Stock C has just paid dividend of $1 per share based on payout ratio of 40%. The analyst expects its return on equity (i.e. ROE) and payout ratio for foreseeable future to remain the same as last year. The ROE is 12%. Assume required return of shareholders for the stock is 11% per year, what is the present value of growth opportunity (i.e. PVGOs) of the stock?
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