A firm is expected to earn $ 100 net income for next year, at the end of

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 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

Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...