Valuing a firm

timer Asked: Mar 23rd, 2016

Question description

Company X is expected to have earnings of 100 in beginning of the 10th year - this is when it begins its earnings. The industry the company is in is expected to have a P/E ratio of 18 in 10 years.

What is the value of the firm today? Use a discount rate of 50%

How much would a 25% share of this company cost today? (This is called the venture capital method)

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