Problem:
A firms earnings and dividends are expected to grow at a constant rate indefinitely, and it is expected to pay a dividend of $9.20 per share next year. Expected EPS and BVPS next year are $10.50 and $30 respectively. The cost of equity is 12% and there are 10,000 shares outstanding.
Required:
Question: Calculate the firms value assuming that the retention ratio stays the same and the market value of debt is $500,000.
Note: Please show guided help with steps and answer.