Suppose that as you finish a valuation exercise on January 1, 20X1, using the abnormal...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Suppose that as you finish a valuation exercise on January 1, 20X1, using the abnormal earnings model, you forecast the abnormal earnings to be $50 at the end of 20X6. From that point, abnormal earnings is expected to grow at 2 percent. The discount rate is 10 percent. The present value factor for a single sum, 5 years, 10%, is 0.681.
What is the present value as of January 1, 20X1 of the abnormal earnings beyond 5 years?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
