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Suppose that a firm's recent earnings per share and dividend per share are $3.60 and $2.60, respectively.

Both are expected to grow at 8 percent. However, the firm's current P/E ratio of 17 seems high for this growth rate.

The P/E ratio is expected to fall to 13 within five years. Compute the dividends over the next five years.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92846123

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