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Question 11 1 pts You (as a private equity investor), are thinking of pursuing this project: - Note that GoodCo REIT is a decent-looking, debt-free
Question 11 1 pts You (as a private equity investor), are thinking of pursuing this project: - Note that GoodCo REIT is a decent-looking, debt-free company. - Buy 100% of GoodCo today for $1,000K - Receive estimated GoodCo dividends of $50K for the next two years (at EOY 1 and EOY 2). - Estimate that, do to your awesome management, GoodCo will have Y2 net income of $60K and a PE ratio of 20 when you sell the firm at EOY 2 (after collecting the Y2 dividend). - You believe that rE for the firm (this is rocc for a debt-free firm) is 12.00% What is the NPV of this project? Hint, recall that the PE ratio can be simplified to (Market value of firm)/ NI. Use units of K (the given units) and represent your answer to two decimal places
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