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Question: Hart Enterprises recently paid a dividend, D0,


Hart Enterprises recently paid a dividend, D0, of $1.25. It expects to have non constant growth of 20% for 2 years followed by a constant rate of 5% thereafter. The firm’s required return is 10%.
a. How far away is the terminal, or horizon, date?
b. What is the firm’s horizon, or terminal, value?
c. What is the firm’s intrinsic value today, ^P0?



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> Assume that today is December 31, 2008, and that the following information applies to Vermeil Airlines: ● After-tax operating income [EBIT(1 – T)] for 2009 is expected to be $500 million. ● The depreciation expense for 2009 is expected to be $100 million

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