Slowly fading away corporation sfa produces replacement


Slowly Fading Away Corporation (SFA) produces replacement components for vintage analog electronic entertainment systems. As many of these items are no longer produces, analysts forecast a stable annual dividend of $12 per share for the next 8 years. After that, dividends are expected to decline by 5% per year indefinitely. The appropriate discount rate is 9%. Based on these dividend forecasts, calculate the intrinsic value of SFA shares.

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Financial Management: Slowly fading away corporation sfa produces replacement
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