Managerial Economics & Business Strategy 8th Edition by Michael Baye,Jeff Prince

تمرين 12

A firm's current profits are $400,000. These profits are expected to grow indefinitely at a constant annual rate of 4 percent. If the firm's opportunity cost of funds is 6 percent, determine the value of the firm
a. The instant before it pays out current profits as dividends.
b. The instant after it pays out current profits as dividends.