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What is the share price of bbc in this case

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Reference no: EM132200001

The Blue Box Corporation (BBC) commits to paying a constant dividend of $5 per share each year, in perpetuity. Suppose that another investment with the same level of systematic risk as BBC's shares has an expected return of 15%.

Now assume that all investors must pay a 20% tax on dividends. What is the share price of BBC in this case?

Reference no: EM132200001

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