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10. Company Zs earnings and dividends per share are expected to grow indefinitely by 5% a year. If next years dividend is $10 and the market capitalization rate is 8%. If company Z were to distribute all its earnings, it could maintain a level dividend stream of $15 a share(EPS-15) How much is the market actually paying per share for growth opportunities? (a) $122.90 (b) $137.55 (c) $145.83 (d) $157.44

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Answer #1

Option c). $145.83 is the answer.

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