Question
You are considering an investment in software company. The beta of software companies is 1.5. The annual risk-free rate is 2% and the annual market
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You are considering an investment in software company. The beta of software companies is 1.5. The annual risk-free rate is 2% and the annual market premium is 8%. The expected annual profit from the software subscription is $100,000 and it is expected to grow at the rate of 6% per year. What is the maximum price you are willing to pay for the company?
A. $1,250,000.00
B. $1,123,221.12
C. $1,370,925.78
D. $908,153.55
You are considering an investment in software company. The beta of software companies is 1.5. The annual risk-free rate is 2% and the annual market premium is 8%. The expected annual profit from the software subscription is $100,000 and it is expected to grow at the rate of 6% per year. What is the maximum price you are willing to pay for the company?
| A. | $1,250,000.00 | |
| B. | $1,123,221.12 | |
| C. | $1,370,925.78 | |
| D. | $908,153.55 |
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Production And Operations Analysis
Authors: Steven Nahmias
6th Edition
0073377856, 9780073377858
