Multiple Choice
Ray's Jams Inc.was just established with an investment of $5 million in stereo equipment.Ray expects his company to generate $800,000 a year for the next 200 years.If Ray's cost of capital is 15%,find the market value and book value of his company.
A) market value = $9.0 million; book value = $5.0 million
B) market value = $5.0 million; book value = $5.3 million
C) market value = $5.33 million; book value = $5.0 million
D) market value = $7.0 million; book value = $5.0 million
Correct Answer:
Verified
Correct Answer:
Verified
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