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You are thinking about investing in a highly risky mine that will produce $50,000,000 worth of ore (rare earth material) in the first year. As
You are thinking about investing in a highly risky mine that will produce $50,000,000 worth of ore (rare earth material) in the first year. As the ore closest to the surface is removed it will become more difficult to extract the ore. Therefore, the value of the ore that you mine will decline at a rate of 20% per year forever. If the appropriate required rate of return rate is 30%, what should be the fair value of the mining operation? Please show work
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