Company Z-prime is like Z in all respects save one: Its growth will stop after year 4.

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Company Z-prime is like Z in all respects save one: Its growth will stop after year 4. In year 5 and afterward, it will pay out all earnings as dividends. What is Z-prime’s stock price? Assume next year’s EPS is $15.

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Principles of Corporate Finance

ISBN: 978-0077404895

10th Edition

Authors: Richard A. Brealey, Stewart C. Myers, Franklin Allen

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Question Posted: Dec 31, 2012 10:30 AM

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Company Z-prime is like Z in all respects save one: Its growth will stop after year 4.

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Principles of Corporate Finance

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