One way to find the value of a share of a stock of a company is to assume the present value of a company is the present value of itsprojected income stream. The value of each share of stock is equal to the present value of the company divided by the number ofshares. For example, if the present value of a company is $10,000 and there are 50 shares of stock, then each share has a present valueof $10,000/50-$200.Find the value of each share of a company with 1250 shares if the company is expected to earn $400,00000 per year, I years fromnow, forever. Assume that the income stream is continuous, and that the continuous interest rate is 5% per year.Round your answer to three decimal places.Value of one share - $Save for LaterAttempts: 0 of 10 used.Submit AnswerQFOMQMaQMaQuMaVie

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Description: One way to find the value of a share of a stock of a company is to assume the present value of a company is the present value of itsprojected income stream. The value of each share of stock is equal to the present value of the company divided by the

Number of shares outstanding = 1250 sharesExpected income = $ 400000Interest rate = 5%Present value…

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Find the value of each share of a company with 1250 shares if the company is expected to earn $400,000 per year, I years from now, forever. Assume that the income stream is continuous, and that the continuous interest rate is 5% per year. Round your answer to three decimal places. Value of one share - $

Find the value of each share of a company with 1250 shares if the company is expected to earn $400,000 per year, I years from now, forever. Assume that the income stream is continuous, and that the continuous interest rate is 5% per year. Round your answer to three decimal places. Value of one share - $

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 66P

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