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Fet 3 Sisters Corp. expects to earn $9 per share next year. The firms ROE is 15% and its plowback ratio is 50%. If the firm
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Answer #1

Growth Rate = ROE*Plowback Ratio

= 15%*50%

= 7.5%

a.Price with growth = 9*50%/(10%-7.5%)

= $180

With no growth = 9/10%

= $90

PVGO = $180-$90 = $90

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