What is present value of all future earnings

Assignment Help Financial Management

Reference no: EM131336555

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 5% per year and continue at that level forever. Your company has just announced earnings of $4 million. What is the present value of all future earnings if the interest rate is 8%?? ?(Assume all cash flows occur at the end of the? year.)

Reference no: EM131336555

Questions Cloud

Compute the value of stock with required return : A firm is expected to pay a dividend of $3.05 next year and $3.35 the following year. Financial analysts believe the stock will be at their price target of $120 in two years. Compute the value of this stock with a required return of 13.3 percent.

Examine the invention and growth of crowdsourcing of design : Crowdsourcing in the field of interface design takes tasks traditionally performed by specific individuals and spreads them out among a group of people or a community. These assignments are usually done through an open call. Crowdsourcing has beco..

Determine the annual earnings on the released funds : Determine the amount of funds released by the lockbox arrangement.- The annual (pretax) earnings on the released funds.

When ranking security returns from highest return to lowest : When ranking security returns from highest return to lowest return, the data shows that the annualized returns are as follows.

What is present value of all future earnings : 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 5% per year and continue at that level foreve..

Outcome expectations in an articulate : Conduct an analysis of a recent article and provide your evaluation and outcome expectations in an articulate and informative paper that discusses:

Compute the value of this stock with a required return : A firm is expected to pay a dividend of $2.65 next year and $2.80 the following year. Financial analysts believe the stock will be at their price target of $45 in two years. Compute the value of this stock with a required return of 12.6 percent.

Investment and saving functions : The real interest rate r is fixed at 3 percent by the investment and saving functions. The expected inflation rate equals the rate of nominal money growth. Identify d(M/P)/di. What does this mean?

Prepare the swot analysis of the organization and offering : Describe the organization's background, industry, and product or service. Describe, in detail, the product or service. Prepare the SWOT analysis of the organization and offering. Explain a competitive analysis of the organization and offering

User Account

All Pages