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Black Hole Inc (BHI), a telescope manufacturer located in southern California, just reported earnings per share...

Black Hole Inc (BHI), a telescope manufacturer located in southern California, just reported earnings per share (EPS) today of $2.00 and is expected to grow its earnings by 15% per year for the next three years. After which, their earnings growth will settle down to 5% per year. The CFO of BHI just announced that the firm will never pay a single dividend to any of its shareholders. The management team is fully entrenched and there is no chance of a successful takeover. If investors demand a 12% return, what is the price of BHI's stock?

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If there will be no dividends, then we cant calculate the price of stock using Dividend Discount Model rather we will have to use relative valuation approach

Price of stock should be 0

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