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Problem regarding present value of all future earnings

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You are running a hot Internet company. Analysts predict that its earnings will grow at 20 % per year for the next five years. After that, as competition increases, earnings growth is expected to slow to 6% per year and continue at that level forever. Your company has just announced earnings of $1 million. What is the present value of all future earnings if the interest rate is 7 %?

(Assume all cash flows occur at the end of the year.)

Reference no: EM131201786

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