A firm's current profits are $750,000...

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Question

A firm's current profits are $750,000. These profits are expected to grow indefinitely at a constant annual rate of 5 percent. If the firm's opportunity cost of funds is 8.5 percent, determine the value of the firm: Round your responses to 2 decimal places - in million
a. The instant before it pays out current profits as dividends
b. The instant after it pays out current profits as dividends.

 

Solution ID:351200 | This paper was updated on 26-Nov-2015

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