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Calculate the present value of growth opportunities

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Reference no: EM132365759

Question

A company has just paid a dividend of $5 per share. The company's dividends are expected to grow at a constant rate of 8% per year forever.
Earnings per share one year from now are expected to be $9.00.

The required rate of return on this share is 12% per year.

Calculate the present value of growth opportunities for the share.

Reference no: EM132365759

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