The answer is Technical
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Answer:
correct option is A. $145
Explanation:
given data
investment cost = $2900
interest rate = 5% per year
solution
formula for present value of perpetuity is
investment cost = fixed cash saving per year ÷ interest rate ..................1
put her value we get fixed cash saving per year that is
saving per year cost = $2900 × 5%
saving per year cost = $2900 × 0.05
saving per year cost = $145
so correct option is A. $145
Answer:
Share price = $85.684
Explanation:
It is given that ,Ke = cost of equity = 15% ,g = Growth = 9.2%% and Dividend and Repurchase = 40%
Now we know that
PV = CF /(Ke- g)
PV = $2.05 billion*0.4 / (0.15-0.092) = 0.84 billion /0.058
=$14137931034.483
Share price = $14137931034.483 / 165000000 million
Share price = $85.684