You are running a hot Internet company. Analysts predict that its earnings will grow at 40% per
Question:
You are running a hot Internet company. Analysts predict that its earnings will grow at 40% per year for the next five years. After that, as competition increases, earnings growth is expected to slow to 3% per year and continue at that level forever. Your company has just announced earnings of $5 million. What is the present value of all future earnings if the interest rate is 7%?
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Calculating the Present Value of Future Earnings To find the present value we need to consider the t...View the full answer
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Related Book For 
Corporate Finance The Core
ISBN: 9781292158334
4th Global Edition
Authors: Jonathan Berk, Peter DeMarzo
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