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You paid $10,000 today to purchase an equity stake and a friend's business. You expect your equity stake will pay you $500 one year from
You paid $10,000 today to purchase an equity stake and a friend's business. You expect your equity stake will pay you $500 one year from today, $550 one year after that, then $605 for the next year, etc. (you forecast cash flows will be annual and continue to grow 10% per year in perpetuity). What is the IRR of this investment opportunity?
a.10.0%
b.15.0%
c.20.0%
d.21.0%
e.none of the above
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