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Business, 22.04.2021 21:40 suewignall

XYZ corp expects to earn $4 per share next year and plow back 37.5% of its earnings (i. e., it expects to pay out a dividend of $2.5 per share, representing 62.5% of its earnings). The dividends are expected to grow at a constant sustainable growth rate and the stocks are currently priced at $30 per share. How much of the stock's $30 price is reflected in Present Value of Growth Opportunities (PVGO) if the investors' required rate of return is 20%

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