Presume the per share PVGO of a firm's common stock is computed as $44, and the firm's current market price is $56. This implies that the capitalized value of the earnings per share the firm is expected to generate under a no-growth policy is:
Net present value of growth opportunities. Can be calculated as: NPVGO = P1 - EPS / r where P1 is the current share ...
The solution computes the capitalized value of EPS in a no-growth policy