Equity firm and net income is projected to grow

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Reference no: EM13917383

Dora Corp. is an all equity firm and its net income is projected to grow 20% in year 1, 25% in year 2, and 30% in year 3, and then 5.5 constant growths thereafter. The retention ratio is held constant at 60% and year 0 net income is 70Millioin. The firm's beta is 1.25, the risk-free rate is 8%, and the market risk premium is 4%, and Dora Corp. has 20Million shares outstanding. If the market is in equilibrium, what is the market capitalization of Dora Corporation?

Reference no: EM13917383

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