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Homework answers / question archive / A company has a current market value of $65 per share with earnings per share of $4

A company has a current market value of $65 per share with earnings per share of $4

Finance

A company has a current market value of $65 per share with earnings per share of $4.32. What is the net present value of its growth opportunities if the required rate of return is 8 percent?

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PVGO = Stock Price - (Earnings / Required Rate)

= 65 - (4.32 / 0.08)

= 65 - 54

= 11