Distinguish between real and nominal values of payments

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Reference no: EM131896826

1. Company BMI will experience a supernormal growth rate of 20% in the next two years. The growth rate will then level off to 4% from year 3 and beyond. The most recent dividend payment was $1.00 and the required rate of return for XYZ stock is 10%. What is the intrinsic value of the BMI stock?

2. Distinguish between real and nominal values of payments. Which is more commonly used in capital budgeting? Why?

Reference no: EM131896826

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