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Book value of common equity and cost of equity capital equal

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As an analyst, you’re asked to calculate V/B Ratio at the start of the year 2016 for Good, Inc, with $1,000 of book value of common equity and a cost of equity capital equal to 12 percent. You forecast that the firm will earn ROCE of 18 percent until year 2020, when the firm will start earning ROCE equal to 12 percent. The company pays no dividends and will not engage in any stock transactions. please show your work.

Reference no: EM131553823

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