Question: You have recently learned that the company where you work
You have recently learned that the company where you work is being sold for $ 300,000. The company’s income statement indicates current profits of $ 11,000, which have yet to be paid out as dividends. Assuming the company will remain a “going concern” indefinitely and that the interest rate will remain constant at 9 percent, at what constant rate does the owner believe that profits will grow? Does this seem reasonable?
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