Afirm’scurrentprofitsare$550,000. indefinitely at a constant annual rate of 5 percent. If the firm’s opportunity cost of funds is 8 percent,

Afirm’scurrentprofitsare$550,000. indefinitely at a constant annual rate of 5 percent. If the firm’s opportunity cost of funds is 8 percent, determine the value of the firm: a. The instant before it pays out current profits as dividends. b. The instant after it pays out current profits as dividends.


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