37. You have invested in a business that proudly reports that it is profitable. Your invest- ment...

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37. You have invested in a business that proudly reports that it is profitable. Your invest- ment of $5000 has produced a profit of $300. The managers think that if you leave your $5000 invested with them, they should be able to generate $300 per year in profits for you in perpetuity. Evaluating other investment opportunities, you note that other long-term investments of similar risk offer an expected return of 8%. Should you remain invested in this firm?

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Fundamentals Of Corporate Finance

ISBN: 9781292018409

3rd Global Edition

Authors: Berk, Peter DeMarzo, Jarrad Harford

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