The current earnings of Video Inc. are $2.00 a share, and it has just paid an annual

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The current earnings of Video Inc. are $2.00 a share, and it has just paid an annual dividend of 40 cents. You forecast that for the next four years both earnings and dividends of the company will continue grow at the rate of 25% a year over the period. From year 5 on, you expect the subsequent growth rate to drop to the industry average of 8%.

If the capitalization rate for the stock is 15%, calculate its price, and the present value of growth opportunities (PVGO).

Related Book For answer-question

Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

ISBN: 978-1337614689

9th edition

Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

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Posted Date: Sep 16, 2023 05:57 AM

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The current earnings of Video Inc. are $2.00 a share, and it has just paid an annual

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Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

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