Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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Transcribed Image Text:You are running a hot Internet company. Analysts predict that its earnings will grow at 10% per year for the next five years. After that, as
competition increases, earnings growth is expected to slow to 3% per year and continue at that level forever. Your company has just announced
earnings of $4 million. What is the present value of all future earnings if the interest rate is 9%? (Assume all cash flows occur at the end of
the year.)
The present value is $ million. (Round to two decimal places.)
...
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