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What should be the current share price of Shawn Inc

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Question - Next year Shawn's EPS is expected to be $4. The firm is not expected to pay any dividends for the next 3 years. In year 4, a dividend of $2 is expected and subsequent dividends are expected to grow at 5 percent per year. Assume that the cost of capital for the firm is 13 percent.

a) What should be the current share price of Shawn Inc?

b) What is the PVGO of Shawn Inc?

Reference no: EM132799101

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