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Calculate the intrinsic value of a bmg share

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BMG Inc. is a recently established and fast growing company. BMG has paid no dividends to date and is unlikely to pay any dividends in the near future. BMG will earn R25 million in net cash flow next year. This cash flow is expected to grow at 25% during the next 3 years and then grow at 9% per year indefinitely. BMG has R150 million in debt and 8 000 000 shares outstanding. Calculate the intrinsic value of a BMG share using a 15% discount rate.

Reference no: EM132999967

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