Multiple Choice
Jay's Jams Inc.was just established with an investment of $3 million.Jay expects his company to generate free cash flow of $800,000 a year for the next 10 years.If Jay's cost of capital is 15%,find the market value and book value of his company.
A) Market value = $8.0 million; book value = $3.0 million
B) Market value = $3.0 million; book value = $4.0 million
C) Market value = $4.0 million; book value = $3.0 million
D) Market value = $8.0 million; book value = $4.0 million
Correct Answer:
Verified
Correct Answer:
Verified
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