Vintage analog electronic entertainment systems

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Reference no: EM131835474

SFA produces replacement components for vintage analog electronic entertainment systems.

As many of these items are no longer produced, analysts forecast a stable annual dividend of $12 per share for the next 8 years.

After that, dividends are expected to decline by 5% per year indefinitely.

The appropriate discount rate is 9%. Based on these dividend forecasts, calculate the intrinsic value of SFA shares.

Reference no: EM131835474

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