Question: Sam can generate 4 in EPS per year forever. The fair return is 12%. They can retain 50% of earnings and invest in a project

Sam can generate 4 in EPS per year forever. The fair return is 12%. They can retain 50% of earnings and invest in a project that will earn 14%. Find the value of the assets in place. Find the value of the growth opportunity. Should Sam buy it?

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