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guapka [62]
3 years ago
10

Tri-Coat Paints has a current market value of $41 per share with earnings of $3.64. What is the present value of its growth oppo

rtunities (PVGO) if the required return is 9%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)
Business
1 answer:
lisov135 [29]3 years ago
3 0

Answer:

$0.56

Explanation:

Tri-coat paints has a current market value of $41 per share

They also have an earning of $3.64

The required return is 9%

= 9/100

= 0.09

Therefore, the present value of its growth opportunities can be calculated as follows

= $41-($3.64/0.09)

= $41-40.44

= $0.56

Hence the present value of its growth opportunities is $0.56

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