PPT Slide

New common F = 15%:

ke = + g

= + 5.0%

= + 5.0% = 15.4%.

But, ke based solely on DCF method.

$4.40

$42.50

D0(1 + g)

P0(1 - F)

$4.19(1.05)

$50(1 - 0.15)

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