Net Income (NI) could be thought of as earnings available for dividends to equity shareholders, assuming none is needed to sustain current operations without further growth. So, let us assume NI will be $500 in year 1 and $525 in year two. Then, the company expects to sell this division for $3,000 at the end of year 3. If the discount rate is 14%, what is the present value of this business division
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- Net Income (NI) could be thought of as earnings available for dividends to equity shareholders, assuming none is needed to sustain current operations without further growth. So, let us assume NI will be $500 in year 1 and $525 in year two. Then, the company expects to sell this division for $3,000 at the end of year 3. If the discount rate is 14%, what is the present value of this business division?
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