[Ali]

Seems logical, thank you.

[Ali]

Equivalent annual cost = Present Value (of first machine)/Annuity Factor (of replacement period)

[Ali]

Ah, I missed the chapter 16 lecture. It’s making more sense after a quick glance at the video, thanks.

[Ali]

1a) I don’t get the question. Surely you would just multiply ordinary share price by number of ordinary shares (3.30 x 5 mil) to get the value of the company

1b) P0 in the growth model is the ex-div market price. Yet we are told the ex-div share price is 3.30. So shouldn’t P0=3.30?
Are you saying P0 is only a theoretical value due to the reasons above?

[Author]

Posts