The book value of a firm on 31/12/2012 is 1000M euros. It is forecasted that ROE during

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Question:

The book value of a firm on 31/12/2012 is 1000M euros. It is forecasted that ROE during 2013 will be 20%. If the payout ratio of the company is 40% and it is expected that it will remain at this value in the next few years, what is the expected value of the book value of equity on 31/12/2013?

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