What should be the price of venture pharma shares

Reference no: EM13304945

Venture Pharma expects to earn Tk.1 million to perpetuity if it does not undertake the new project. There are 100,000 shares outstanding of the company. Alternately, the firm can spend Tk.1 million in a new marketing campaign, at the end of the first year. The new campaign will increase earnings in every subsequent period by Tk.210,000. If the firm's discount rate is 10%, what should be the price of Venture Pharma's shares, if it did not and if it did undertake the marketing campaign?

Reference no: EM13304945

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