Constantly growing stream of operating cash flows

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Reference no: EM132002139

A company is expected to generate a constantly growing stream of operating cash flows that continues forever (growing perpetuity). Calculate the present value (i.e. the amount of cash that you as an investor would be willing to pay for such a company) of the company if the cash flows are $1,000, the growth rate of these cash flows is 2% per year and the discount rate is 7%. Please show both work as well as financial calculator input.

Reference no: EM132002139

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