Calculate the intrinsic value of SFA shares

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Slowly Fading Away Corporation (SFA) produces replacement components for vintage analog electronic entertainment systems. As many of these items are no longer produces, analysts forecast a stable annual dividend of $12 per share for the next 8 years. After that, dividends are expected to decline by 5% per year indefinitely. The appropriate discount rate is 9%. Based on these dividend forecasts, calculate the intrinsic value of SFA shares.

Reference no: EM131848871

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