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(Created page with "The value of company ABC is the PV of the growing annuity of cash flow: PV = 10/(1.09−1.05) = $250 million. '''References''' {{cite web |url=https://alo.mit.edu/wp-content/uploads/2015/06/PS_Part1.pdf |last1=Lo |first1=Andrew W. |last2 = Wang | first2 = Jiang |website=alo.mit.edu | title = MIT Sloan Finance Problems and Solutions Collection Finance Theory I | access-date=November 30, 2023}}") |
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The value of company ABC is the PV of the growing annuity of cash flow: | The value of company ABC is the PV of the growing annuity of cash flow: | ||
Latest revision as of 19:02, 4 December 2023
Solution: D
The value of company ABC is the PV of the growing annuity of cash flow:
PV = 10/(1.09−1.05) = $250 million.
References
Lo, Andrew W.; Wang, Jiang. "MIT Sloan Finance Problems and Solutions Collection Finance Theory I" (PDF). alo.mit.edu. Retrieved November 30, 2023.