Question
You are interested in a review course for a professional designation and need to perform a valuation. The benefit of gaining the designation is an
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You are interested in a review course for a professional designation and need to perform a valuation.
The benefit of gaining the designation is an increase in your annual earnings of $2,500 each year, which will grow along with your salary at 2% each year.
In light of other risky investments, you feel that a discount rate of 20% is appropriate.
Since this is lifetime change in your life, you believe that this valuation can treated as a perpetuity and specifically its a Growth Perpetuity Valuation Model.
What is the maximum you are willing to pay for this course?
a. Maximum to pay for course is $ 2,550
b. Maximum to pay for course is $12,500
c. Maximum to pay for course is $13,889
d. Maximum to pay for course is $15,985
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The Sterling Bonds And Fixed Income Handbook
Authors: Mark Glowrey
1st Edition
0857190423, 978-0857190420
