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Bill Clinton reportedly was paid an advance of $ 1 0 . 0 million to write his book My Life. Suppose the book took 3
Bill Clinton reportedly was paid an advance of $ million to write his book My Life. Suppose the book took years to write. In the time he spent writing, Clinton could have been paid to make speeches. Given his popularity, assume that he could earn $ million a yearpaid at the end of the year speaking instead of writing. Assume his cost of capital is per year. Assume that, once the book is finished, it is expected to generate royalties of $ million in the first yearpaid at the end of the year and these royalties are expected to decrease at a rate of per year in perpetuity. What is the NPV of the book with the royalty payments?
The NPV of the book with the royalty payments is $
enter your response here million. Round to three decimal places.
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