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Finance

Problem:

One share of Jumanji Inc. currently sells for $42 per share and has just paid an annual dividend of $1.25 per share. The investors in Jumanji expect the stock to earn an annual rate of return of 12%.

(a) What would have been the stock price today if Jumanji had no growth opportunities?

(b) What is the present value of growth opportunities?

Additional Information:

This question is basically belongs to the Finance as well as it explains about computing stock price with no growth opportunities, present value of growth opportunities.

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