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Suppose a firm with a ROE of 12%. The earnings per share (EPS) next year are projected at $3, and the firms earnings retention ratio
Suppose a firm with a ROE of 12%. The earnings per share (EPS) next year are projected at $3, and the firms earnings retention ratio is 0.75. The required return for the firm is 15%. Compute the following for the firm:
a) Intrinsic value
b) Present value of growth opportunity
c) Tangible P/E ratio
d) Franchise value
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