Solved

Decline, Inc

Question 9

Multiple Choice

Decline, Inc. currently produces cash flows of $650,000 a year. However, these cash flows are expected to decline by 1% a year indefinitely. If Decline's cost of equity capital is 8%, what is
Its current market value?


A) $9,193,000
B) $9,286,000
C) $7,222,222
D) $7,150,000

Correct Answer:

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