An investment promises to pay you $100 per year starting in five years. The cash flow from

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An investment promises to pay you $100 per year starting in five years. The cash flow from the investment is expected to increase by 3 percent per year forever. If alternative investments of similar risk earn a return of 9 percent per year, determine the maximum you would be willing to pay for the investment.


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Introduction To Corporate Finance

ISBN: 9781118300763

3rd Edition

Authors: Laurence Booth, Sean Cleary

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