Problem 8-35 P/E Model and Cash Flow Valuation (LG8-5, LG8-7) Suppose that a firm's recent...
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Problem 8-35 P/E Model and Cash Flow Valuation (LG8-5, LG8-7) Suppose that a firm's recent earnings per share and dividend per share are $2.30 and $1.30, respectively. Both are expected to grow at 7 percent. However, the firm's current P/E ratio of 22 seems high for this growth rate. The P/E ratio is expected to fall to 18 within five years Compute the dividends over the next five years. (Do not round intermediate calculations. Round your answers to 3 decimal places.) Answer is complete and correct. Dividends Yescar 1.3910 First year Second year Third year 1.488 ar 1,593 wth yesar 1.nn. Fifth year 1.8230
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