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Question: Two-Stage Growth Valuation (Medium) An analyst develops the following pro fonna at the end of2012 for a firm that uses a 9 percent hurdle rate for its operations (in millions):

a. Forecast the cum-dividend operating income growth rate for 2014.

b. Using the two-stage growth model 15.5, value the equity with a long-tenn growth rate of 4 percent.

c. What is the forward enterprise price/earnings ratio implied by the valuation?

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Category:- Basic Finance
Reference No.:- M92299892

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