Expected to grow indefinitely at constant annual rate

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Reference no: EM131164533

A firm's current profits are $650,000. These profits are expected to grow indefinitely at a constant annual rate of 5 percent. If the firm's opportunity cost of funds is 7 percent, determine the value of the firm:

Instructions:

Round your responses to 2 decimal places.

a. The instant before it pays out current profits as dividends

b. The instant after it pays out current profits as dividends.

Reference no: EM131164533

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