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Suppose a company is expected to earn $2.40 per share next year. We assume that the company has to plow back 40% of its earnings
Suppose a company is expected to earn $2.40 per share next year. We assume that the company has to plow back 40% of its earnings in order to grow 5% per year. The cost of equity is 10%. Whats the present value of growth opportunity (PVGO) of this company?
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