Level for the foreseeable future

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The net income of a publicly-traded company is currently $120 million. A leading Wall Street financial analyst believes that the company's net income will continue to grow at a rate of 3 percent annually. There are 10 million shares outstanding. What is the analyst's best estimate of the company's share price if the relevant risk-adjusted interest rate falls from 6 percent to 5 percent, and remains at that level for the foreseeable future?

a. $282

b. $356

c. $630

d. $512

e. $424

Reference no: EM131428029

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