Suppose the Interest Rate Is Five Percent, the Expected Growth

question 104

Multiple Choice

Suppose the interest rate is five percent, the expected growth rate of the firm is two percent, and the firm is expected to continue forever.If current profits are $1,000, what is the value of the firm?

• A)$31,000.
• B)$30,000.
• C)$26,500.
• D)$35,000.

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