Comparing two firms that you would like to invest

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Reference no: EM131815847

You are comparing two firms that you would like to invest in. The first: University Park Corp. generated profits this year of $50,000. These profits are expected to grow indefinitely at a rate of 3% per year. The second: Chicago Ltd. generated profits this year of $75,000, already distributed dividends to their shareholders, and their profits are expected to grow at a rate of 2% per year indefinitely. Which firm do you think you should invest in, if the interest rate is 5%?

Reference no: EM131815847

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