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Suppose you are valuing a Firm A's stock. Firm A is expected to have an EPS of $2.5 and pay out 80% of its earnings.

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Suppose you are valuing a Firm A's stock. Firm A is expected to have an EPS of $2.5 and pay out 80% of its earnings. Firm A earns 10% on its reinvested capital. Firm A's cost of equity is 10% whereas its WACC is 8%. What is the value of Firm A's stock? (4 points) b. What is the present value of growth opportunities (PVGO)? (4 points) Can you explain why Firm A's PVGO is what you calculated in part b? (4 points) a. C

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