If Ideko's Future Expected Growth Rate Is 5% and Its

question 27

Multiple Choice

If Ideko's future expected growth rate is 5% and its WACC is 9%,then the continuation value in 2010 is closest to:

• A)164,200
• B)278,775
• C)280,450
• D)303,425

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Definitions:

Firm

A business organization, such as a corporation or partnership, which sells goods or services in exchange for money.

AFC

Average Fixed Cost, the fixed costs of production divided by the quantity of output produced.

Variable Costs

Costs that change in proportion to the good or service that a business produces, such as materials and labor.

Output

The sum of all products or services generated by a business or economic system.