User Account

All Pages

Present value of all future earnings

Assignment Help Finance Basics
Reference no: EM131200548

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: EM131200548

Questions Cloud

Can you please describe some of the types of current assets : Can you please describe some of the types of current assets and current liabilities? When we are calculating the ratios we need to determine which numbers to use in our calculation.
Problem regarding the encourage collections : Your firm shows receivables building faster than sales. What actions should you take to encourage collections?
Prepare a proforma income statement for the home office : Prepare a proforma income statement for the Home Office Systems group given the information provided.- Prepare a proforma income statement for the Home Office Systems group given annual sales of only $20 million.
Why you consider each to be an ethical issue and problem : Briefly describe each ethical issue, problem, or flaw you found in the Stanford Prison Experiment. Explain why you consider each to be an ethical issue, problem, or flaw. Explain whether the same research, if conducted today, would be considered ethi..
Present value of all future earnings : 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.)
How does he get a single pint in either glass : A bartender has a three-pint glass and a five-pint glass. A customer walks in and orders four pints of beer. Without a measuring cup but with an unlimited supply of beer how does he get a single pint in either glass?
Various capital budgeting methods : Define the various capital budgeting methods such as net present value (NPV), internal rate of return (IRR), and so on, and explain how they differ from one another. Identify which, if any, of the methods discussed might be superior to the others ..
Investor to factor into the decision-making process : Identify and define up to three concepts associated with making capital investment decisions such as cash flows, sunk costs, opportunity costs, or others. Discuss why your selected concepts are important for the investor to factor into the decisio..
Provide the journal entries for the given purchases : If required please provide me with the journal entries for the following purchases; and net income and dividends paid.

Reviews

Write a Review

Finance Basics Questions & Answers

  Speedy delivery systems can buy a piece of equipment that

speedy delivery systems can buy a piece of equipment that should provide an 6 percent return and can be financed at 3

  This project would require an initial cash outlay of

this project would require an initial cash outlay of 5500000 and would generate annual net cash inflows of 1100000 per

  Which of the following is a primary market transaction

Which of the following is a primary market transaction?

  What are the pros and cons of setting a target rating

Some companies’ debt-equity targets are expressed not as a debt ratio, but as a target debt rating on a firm’s outstanding bonds.What are the pros and cons of setting a target rating, rather than a target ratio?

  Two methods for estimating debit cost of capital

What are the two methods for estimating debit cost of capital, and what do you do when there is default risk? Explain the circumstances in which you would use each method.

  An otherwise identical but levered firm has 240 million in

an unlevered firm has a value of 600 million. an otherwise identical but levered firm has 240 million in debt. under

  Cost an investor to buy a long strangle

What will it cost an investor to buy a long strangle today?

  Identical call option on the same stock

A European put option on a stock priced at $50 has a price of $3. The present value of the exercise price of the option is $49. The stock is not expected to pay a dividend. What must be the price of an identical call option on the same stock?

  Your companys offer is for 3000000 in cash upon signing

your company seeks to take over good deal company.nbsp your companys offer is for 3000000 in cash upon signing the

  The company is expected to maintain a constant 6 percent

suppose a company just issued a dividend of 1.90 per share on its common stock e.g. d0 1.90. the company is expected

  Determine the net present value of the projects

Keller Construction is considering two new investments. Project E calls for the purchase of earthmoving equipment. Project H represents an investment in a hydraulic lift. Keller wishes to use a net present value profile in comparing the projects.

  Assume that you want to realize profit in terms of euros

suppose that the current spot exchange rate is euro0.80 and the three-month forward exchange rate is euro0.7813. the

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd