Moonshine Industries Has Produced a Barrel Per Week for the Past

question 60

Essay

Moonshine Industries has produced a barrel per week for the past 20 years but cannot grow because of certain legal hazards.It earns $25 per share per year and pays it all out to stockholders.The stockholders have alternative,equivalent-risk ventures yielding 20% per year on average.How much is one share of Moonshine worth? Assume the company can keep going indefinitely.

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