The instant after it pays out current profits as dividends

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Reference no: EM13998738

A firm's current profits are $700,000. These profits are expected to grow indefinitely at a constant annual rate of 3 percent. If the firm's opportunity cost of funds is 5 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.

$ million

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

$ million

Reference no: EM13998738

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