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Restful RVs Inc. (RRV) is presently enjoying relatively highgrowth because of a surge in the demand for recreational vehicles.Management expects earnings and dividends to grow at a rate of 35%for the next 4 years, after which high gas prices will probablyreduce the growth rate in earnings and dividends to zero, i.e., g =0. The company’s last paid dividend, D0, was $1.95. RRV’s beta is1.50, the market risk premium is 5.75%, and the risk-free rate is3.00%. What is the intrinsic value of RRV’s common stock? Enteryour answer rounded to two decimal places. Do not enter $ or commain the answer box. For example, if your answer is $12,300.456 thenenter as 12300.46 in the answer box.
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