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Sisters Corp expects to earn $8 per share next year. The firm’s ROE is 10% and its plowback ratio is 60%. If the firm’s market capitalization rate is 8%.

a. Calculate the price with the constant dividend growth model. (Do not round intermediate calculations.)

Price            $

b. Calculate the price with no growth.

Price            $

c. What is the present value of its growth opportunities? (Do not round intermediate calculations.)

PVGO

Financial Management, Finance

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