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A Firm Currently Earns $1

Question 28

Essay

A firm currently earns $1.00 per share. A financial analyst believes that earnings will grow annually at the rate of 10 percent for five years and then decline to 5 percent. What are the expected earnings after ten years?

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1(1+.1)5(1+.05)5=$2.055
(PV=-1;...

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