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Next Year's Expected EPS for Swanti Industries Is $5 and the Firm

Question 49

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Next year's expected EPS for Swanti Industries is $5 and the firm has a 60% payout ratio. Swanti's stock has a beta of 1.1, a required return of 10% and is selling at $120. Find Swanti's present value of growth opportunities (PVGO) and the percent PVGO is of Swanti's current price.

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A) $120 - (5 / 0.10)...

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