10. Company Z's earnings and dividends per share are expected to grow indefinitely by 5% a year. If next year's dividend is $10 and the market capitalization rate is 8%. If company Z were to distribute all its earnings, it could maintain a level dividend stream of $15 a share(EPS=15). How much is the market actually paying per share for growth opportunities? (a) $122.90 (b) $137.55 (c) $145.83 (d) $157.44

10. Company Z's earnings and dividends per share are expected to grow indefinitely by 5% a year. If next year's dividend is $10 and the market capitalization rate is 8%. If company Z were to distribute all its earnings, it could maintain a level dividend stream of $15 a share(EPS=15). How much is the market actually paying per share for growth opportunities? (a) $122.90 (b) $137.55 (c) $145.83 (d) $157.44

Name: 10. Company Z's earnings and dividends per share are expected to grow
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Description: 10. Company Z's earnings and dividends per share are expected to grow indefinitely by 5% a year.If next year's dividend is $10 and the market capitalization rate is 8%. If company Z were todistribute all its earnings, it could maintain a level divid

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter7: Valuation Of Stocks And Corporations

Section: Chapter Questions

Problem 21P

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