For Summa, assume that the discount rate used, k, is 16 percent instead of 15 percent, with
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For Summa, assume that the discount rate used, k, is 16 percent instead of 15 percent, with other variables held constant:
In this example, a 1‐percentage‐point increase in k results in an 11.14 percent decrease in estimated value from $13.38 to $11.89.
Transcribed Image Text:
Vo = $1(1.07) 0.16 0.07 = $11.89
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Related Book For
Investments Analysis And Management
ISBN: 9781118975589
13th Edition
Authors: Charles P. Jones, Gerald R. Jensen
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