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32. Spring Break, Inc. just paid an annual dividend (DC) of $2.00 per share on earnings of $3.00. You expect the firms divid

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Answer #1

1.
=risk free rate+beta*market risk premium
=4%+1.1*5%
=9.5%

2.
=2*1.25/1.095+2*1.25^2/1.095^2
=4.88939

3.
=2*1.25^2/1.095^2*1.06/(9.5%-6%)
=78.93318

4.
=4.88939+78.93318
=83.82257

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