Business, 20.10.2020 20:01 castilloitc1120

Sparkling Water, Inc., expects to sell 3.7 million bottles of drinking water each year in perpetuity. This year each bottle will sell for $1.46 in real terms and will cost $.82 in real terms. Sales income and costs occur at year-end. Revenues will rise at a real rate of 1.7 percent annually, while real costs will rise at a real rate of .8 percent annually. The real discount rate is 5 percent. The corporate tax rate is 25 percent. What is the company worth today?

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Sparkling Water, Inc., expects to sell 3.7 million bottles of drinking water each year in perpetuity...

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