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River Enterprises has ?$500 million in debt and 1818 millionshares of equity outstanding. Its excess cash reserves are $16million. They are expected to generate ?$206 million in free cashflows next year with a growth rate of 22?% per year in perpetuity.River? Enterprises' cost of equity capital is 12?%. After analyzingthe? company, you believe that the growth rate should be 33?%instead of 22?%. How much higher? (in dollars) would the price pershare be if you are? right?
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