Sisters corp expects to earn 5 per share next year the


Sisters Corp expects to earn $5 per share next year. The firm’s ROE is 15% 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.

Price =

b. Calculate the price with no growth

Price =

c. What is the present value of its growth opportunities

PVGO =

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Financial Management: Sisters corp expects to earn 5 per share next year the
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