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In: Finance

You are running a hot Internet company. Analysts predict that its earnings will grow at 20%...

You are running a hot Internet company. Analysts predict that its earnings will grow at

20%

per year for the next five years. After​ that, as competition​ increases, earnings growth is expected to slow to

6%

per year and continue at that level forever. Your company has just announced earnings of

$1

million. What is the present value of all future earnings if the interest rate is

8%​?

​(Assume all cash flows occur at the end of the​ year.)

Solutions

Expert Solution

The Answer is $96.67 and go through attached for calculations

jeff jeffy answered 2 years ago
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