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The Generic Genetic (GG) Corporation pays no cash dividends currently and is not expected to do so for the next four years. Its latest EPS
The Generic Genetic (GG) Corporation pays no cash dividends currently and is not expected to do so for the next four years. Its latest EPS was $5, all of which was reinvested in the company. The firm's expected ROE for the next four years is 20% p.a., during which time it is expect to continue to reinvest all of its earnings. Starting in year 5, the firm's ROE on new investments is expected to fall to 15% per year. GG's market capitalization rate is 15% per year. What is your estimate of GG's intrinsic value per share?
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