Sisters corp expects to earn 7 per share next year the


Sisters Corp expects to earn $7 per share next year. The firm’s ROE is 14% and its plowback ratio is 60%. If the firm’s market capitalization rate is 10%.

a. Calculate the price with the constant dividend growth model. (Do not round intermediate calculations.)

  Price $

b. Calculate the price with no growth.

  Price $

c. What is the present value of its growth opportunities? (Do not round intermediate calculations.)

  PVGO $

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Financial Management: Sisters corp expects to earn 7 per share next year the
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