Question: EPS(1) = $10 Dividends per share (1) =0 Book Value per share (0) =$30 Horwitzs Bakery has just one product and does not plan to

EPS(1) = $10 Dividends per share (1) =0 Book Value per share (0) =$30 Horwitzs Bakery has just one product and does not plan to launch any new ones. It does not plan to pay any dividends in periods 1, 2 or 3. Thereafter you think that it will set dividends equal to its earnings. Assume that the ROE will stay constant over time. Also, assume that the opportunity cost of capital is 12%. How much is Horwitzs Bakery Company worth per share?

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