You've recently learned that the company where you work is being sold for $460,000. The company's income statement indicates current profits of $17,000, which have yet to be paid out as dividends. Assuming the company will remain a "going concern" indefinitely and that the interest rate will remain constant at 8 percent, at what constant rate does the owner believe that profits will grow? Instruction: Enter your response rounded to two decimal places. Growth rate of: percent.
You've recently learned that the company where you work is being sold for $460,000. The company's income statement indicates current profits of $17,000, which have yet to be paid out as dividends. Assuming the company will remain a "going concern" indefinitely and that the interest rate will remain constant at 8 percent, at what constant rate does the owner believe that profits will grow? Instruction: Enter your response rounded to two decimal places. Growth rate of: percent.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:You've recently learned that the company where you work is being sold for $460,000. The company's income statement
indicates current profits of $17,000, which have yet to be paid out as dividends. Assuming the company will remain a "going
concern" indefinitely and that the interest rate will remain constant at 8 percent, at what constant rate does the owner believe
that profits will grow?
Instruction: Enter your response rounded to two decimal places.
percent.
Growth rate of:
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