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What is the present value of the firm

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Question - VALUATION CONCEPTS AND METHOD - Consider a firm that expects to generate the following earnings stream over the next five years. The terminal value in Year 5 is based on a multiple of 15 times that year's earnings.

Year 1 P50,000

Year 2 P60,000

Year 3 P65,000

Year 4 P70,000

Year 5 P750,000 (terminal value)

Using a discount rate of 8%, what is the present value of the firm? What is the present value if the terminal value is based on 10 times Year 5 earnings?

Reference no: EM133093466

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