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hard · CFA Level I Equity Investments

BlueStream Water pays an annual dividend of D_0 =2.00. Investors require a10%return, and dividends are expected to grow at a constant rate of4%indefinitely.

The justified leadingP/Emultiple based on next year's earnings of 5.00 is closest to:

  1. 6.93
  2. 8.67
  3. 6.67

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