Your companyhas earnings of $19.7 million and is projected to grow at a constant rate of 4

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Your companyhas earnings of $19.7 million and is projected to grow at a constant rate of 4 percent forever because of the benefits gained from the learning curve. Currently, all earnings are paid out as dividends. The company plans to launch a new project two years from now that would be completely internally funded.The company has 9.2 million shares of stock outstanding.Estimate the value of the stock with adiscount rate of14%.NPVGO per share of the new project to be launched two years from now is estimated to be $5.9in Year 2.

A. 22.27

B. 16.37

C. 26.81

D. 15.9

Posted Date: May 19, 2024 11:15 AM

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Your companyhas earnings of $19.7 million and is projected to grow at a constant rate of 4

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