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Trend-Line Inc. has been growing at a rate of 6 percent per year and is expected...

Trend-Line Inc. has been growing at a rate of 6 percent per year and is expected to continue to do so indefinitely. The next dividend is expected to be $5 per share. If the market expects a 10 percent rate of return on Trend-Line and If Trend-Line's earnings per share will be $9,

what part of Trend-Line's value is due to assets in place?

what part of Trend-Line's value due to the growth opportunities?

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Answer #1

value is due to assets in place Dividend/(Ke-g) 5/(0.10-0.06) 125.00 bolo Growth rate Expected rate of return Price Earning p

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