Question: Question 2 4 pts Questions (Al-A2) are based on the information that follows. Net earnings for a constant dividend growth firm are currently $60 million
Question 2 4 pts Questions (Al-A2) are based on the information that follows. Net earnings for a constant dividend growth firm are currently $60 million and expected to grow forever at 10%. The firm has a policy of paying out a constant 30% of earnings as dividends. Shares outstanding are 5 million. RM= 12.5% and RRE= 5%. The firm's cost of capital is 17.5% and is expected to be unchanged for the indefinite future. Al. What should be the current value of the firm (in millions of $)? (a) $250.00 (b) $100.00 (c) $220.00 (d) $264.00 (e) $380.00
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