Compute the price of the company

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There is a firm which reinvests its profits back in itself. Consequently, it does not distribute any of its profit to the owners for the first 5 years. Afterward, it begins paying $6 per share for the sixth year. That rises by 200% for the 7th year and by 100% for the 8th. Beyond the 8th year, it grows perpetually at a constant rate. Its dividend payout ratio is .6, Its D/E is 50/50, its tax rate is .2, and its unlevered beta is 1. The net profit margin is .05. The asset turnover ratio is 2. If the information for the last two sentences is applying to year 9, compute the price of the company.

Reference no: EM132001659

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