The implied value of the firm growth opportunities

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Reference no: EM131983829

Fincorp will pay a year-end dividend of $2.60 per share, which is expected to grow at a rate of 2% for the indefinite future. The discount rate is 6%.

a. What is the stock selling for? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

b. If earnings are $3.60 a share, what is the implied value of the firm’s growth opportunities? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

Reference no: EM131983829

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