Suppose the growth rate of the firm’s profit is 5 percent, the interest rate is 6 percent, and the current profits of the firm are

Question

Suppose the growth rate of the firm’s profit is 5 percent, the interest rate is 6 percent, and the current profits of the firm are $80 million. what is the value of the firm?

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Tài Đức 1 month 2022-12-26T19:25:23+00:00 1 Answer 0 views 0

Answer ( 1 )

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    2022-12-26T19:27:08+00:00
    The calculate value of the firm is the  growth rate of the firm’s profit is 5 percent, the interest rate is 6 percent, and the current profits of the firm are $80 million = 8480 million

    How to solve for the value of the firm

    (1+r/r -p) * P
    This can be substituted in the equation
    1.06/ ( 0.06 – 0.05) * 80 million = 8480 million
    Hence the value of the firm is given as  8,480 million dollars. The correct answer is C.
    Suppose the growth rate of the firm’s profit is 5 percent, the interest rate is 6 percent, and the current profits of the firm are $80 million, the value of the firm is 8480 million
    Complete question
    Suppose the growth rate of the firm’s profit is 5 percent, the interest rate is 6 percent, and the current profits of the firm are $80 million. What is the value of the firm?
    A. $89.2 million
    B. $1,413.3 million
    C. $8,480 million
    D. None of the statements associated with this question are correct.
    Read more on interest rate here: https://brainly.com/question/25793394
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