Explore BrainMass

Explore BrainMass

    Present Value of Growth Opportunity

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Cisco will pay a dividend of $5 per share next year, and the dividends pay out ratio is 50%. Dividends are expected to grow at a constant rate of 8% forever and the required rate of return on the stock is 13%. Calculate the present value of the growth opportunity.

    a. $100
    b. $76.92
    c. $23.08
    d. None of the above

    © BrainMass Inc. brainmass.com June 4, 2020, 1:30 am ad1c9bdddf

    Solution Summary

    Solution explains Present Value of Growth Opportunity