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XYZ corp expects to earn $3.0 per share next year and plow back 16.67% of its earnings (i.e., it expects to pay out a dividend
XYZ corp expects to earn $3.0 per share next year and plow back 16.67% of its earnings (i.e., it expects to pay out a dividend of $2,5 per share, representing 83.33% of its earnings). The dividends are expected to grow at a constant sustainable growth rate and the stocks are currently priced at $30 per share. How much of the stock's $30 price is reflected in Present Value of Growth Opportunities (PVGO) if the investors' required rate of return is 20%? $
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