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Suppose that sales and profits of Oly Enterprises are growing at a rate of 30% per year At the end of 4 years t4 the growth rate will drop to a steady 5% Oly recently paid a dividend of $1 per

Suppose that sales and profits of Oly Enterprises are growing at a rate of 30% per year. At the end of 4 years (t4) the growth rate will drop to a steady 5%. Oly recently paid a dividend of $1 per share. If the required return is 20%, what is the value of one Oly share today (t0)? (Assume dividends grow at the same rate as earnings after year 4.)View Solution:
Suppose that sales and profits of Oly Enterprises are growing

 

Apr 29 2020 View more View Less

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