6. Is it possible to value the company below using the constant growth model? Why or why not? Explain. rf-5% rm-17% beta -0.8 DO = $1 g=50%

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter12: Corporate Valuation And Financial Planning
Section12.6: Additional Funds Needed (afn) Equation Method
Problem 5ST
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6. Is it possible to value the company below using the constant growth model? Why or why
not? Explain.
rf=5%
rm 17%
beta=0.8
DO = $1
g=50%
Transcribed Image Text:6. Is it possible to value the company below using the constant growth model? Why or why not? Explain. rf=5% rm 17% beta=0.8 DO = $1 g=50%
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