Question

A firm is expected to earn $ 100 net income for next year, at the end of which time the firm will be wound up. The $ 100 expected earnings includes gains and losses from disposals of assets and liabilities, and all other winding up costs. The firm’s book value at the beginning of the year is $ 600, and its cost of capital is 12%. What is the firm’s estimated market value at the beginning of the year?
a. $ 625.00
b. $ 672.00
c. $ 689.29
d. $ 700.00



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  • CreatedSeptember 09, 2014
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