Determine the value of the firm


A firms current profits are $550,000. These profits are expected to grow indefinitely at a constant rate of 5%. If the firm's opportunity cost of funds is 8%, determine the value of the firm:

a) The instant before it pays out current profits as dividends.

B) The instant after it pays out current profits as dividends.

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Microeconomics: Determine the value of the firm
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