What is the value of the firm according to a dcf valuation

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Assume that Energia del Sur is an electric company operating with no debt in a country where buybacks are forbidden. Thus, the company remunerates its shareholders only by paying dividends. The payout ratio is 100%. Analysts expect that during the next few years the company's dividends will increase rapidly and then grow at a stable rate. Next year's dividendis expected to be $1 per share, but dividends will increase annually by 7%, then 10%, then 12%, and then steadily increase by 5% after that. Analysts expect the company to have an indefinite life since it enjoys a natural monopoly in the country. What is the value of the firm according to a DCF valuation with 10% annual discount rate? Usually this is called the "intrinsic value" relative to the market value assigned by the stock market.

Input two decimals

Reference no: EM132524928

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