The PV of a company is $67.80 and has the following current and expected cash flows. The
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The PV of a company is $67.80 and has the following current and expected cash flows. The sustainable growth rate (or terminal value growth rate) is 1%. What is the discount rate used to calculate the PV of $67.80?
Cash Flow | $ 2.72 | $ 2.80 | $ 2.89 | $ 2.97 |
|---|---|---|---|---|
Time Period | 0 | 1 | 2 | 3 |
A. 5.25
B. 4.75
C. 4.25
D. 5.75
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