Question

A company has revenue of $1000 in 2009. Our current estimate is that revenues will grow 25% per year. Our profit each year wi

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Profit for 2009 = 1000*20% = $200

200+200(1+g)+200(1+g)^2+200(1+g)^3+200(1+g)^4+200(1+g)^5+200(1+g)^6 = 15000

On solving the above equation we get

g = 80%

Annual growth rate = 80%

Add a comment
Know the answer?
Add Answer to:
A company has revenue of $1000 in 2009. Our current estimate is that revenues will grow...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • I don't really understand how to estimate revenue. I have been given revenues from previous years...

    I don't really understand how to estimate revenue. I have been given revenues from previous years and I am being asked to estimate the revenue for FY2020 and explain my rationale. Please help thank you! Please show all relevant work so I can understand how you got to the answer. Thank yOU! Year Revenue Collections 2002 $                      329,687 2003 $                      384,829 2004 $                      378,109 2005 $                      447,858 2006 $                      523,845 2007 $                      621,253 2008 $                      824,460 2009 $                      739,140 2010 $                      821,729 2011 $                  1,035,700 2012 $                      901,902 2013 $                      867,344 2014...

  • A company has just paid a $2 per share dividend. The dividends are expected to grow...

    A company has just paid a $2 per share dividend. The dividends are expected to grow by 24% a year for 8 years. The growth rate in dividends thereafter is expected to stabilize at 4% a year. The appropriate annual discount rate for the company’s stock is 12%. a. What is the company’s current equilibrium stock price? b. What is the company’s expected stock price in 20 years?

  • Che The Duo Growth Company just paid a dividend of $1.00 per share. The dividend is expected to grow at a rate of 26% p...

    Che The Duo Growth Company just paid a dividend of $1.00 per share. The dividend is expected to grow at a rate of 26% per year for the next three years and then to level off to 5% per year forever. You think the appropriate market capitalization rate is 21% per year. a. What is your estimate of the intrinsic value of a share of the stock? (Use intermediate calculations rounded to 4 decimal places. Round your answer to 2...

  • Robert Limited has just paid a current (annual) dividend of $1 which is expected to grow...

    Robert Limited has just paid a current (annual) dividend of $1 which is expected to grow by 20% at the end of one year from now and then by 15% at the end of two years from now. The dividend growth rate will stabilize at a constant 5% p.a. thereafter. If the cost of equity for Robert Limited is 20% p.a., what is the fair value of a Robert Limited share at the present time?

  • If OpulCars's revenues in Manchester grow by 30% next year, what will their market share be?...

    If OpulCars's revenues in Manchester grow by 30% next year, what will their market share be? Recent Performance (In £ millions) 96.20 58.80 36.70 33.23 11.32 5.73 2014 2015 2016 Gross Profit Total Revenue Share of Revenue by Location Edinburgh Edinburgh 20% London 44% London 39% 31% Rest of U.K. 13% Rest of U.K. 8% Manchester 22% Manchester 23% 2015 2016 Silicon trader THE NEW LUXURY RIDE: OPULENCE IN TRANSPORT by Kevin Harrington Luxury rideshare firm OpulCars prices at 124...

  • a. By what percentage did​ Mydeco's revenues grow each year from 2013 to 2016? b. By...

    a. By what percentage did​ Mydeco's revenues grow each year from 2013 to 2016? b. By what percentage did net income grow each​ year? c. Why might the growth rates of revenues and net income​ differ? 2012-2016 Financial Statement Data and Stock Price Data for Mydeco Corp (All data as of fiscal year end; in $ millions) 2012 2014 2016 Income Statement Revenue Cost of Goods Sold 2013 2015 402.5 (185.4) 217.1 366.5 (173.6) 192.9 (67.2) (57.3) 428.2 (202.2) 226.0...

  • You are trying to value ListoFact, a data processing company. The company generated $1 billion in revenues in the most recent financial year and expects revenues to grow 3% per year in perpetuity. It...

    You are trying to value ListoFact, a data processing company. The company generated $1 billion in revenues in the most recent financial year and expects revenues to grow 3% per year in perpetuity. It generated $30 million in after-tax operating income in the most recent financial year and expects after-tax operating margin to increase 1% per year starting from the current year (Year 0) to year 3. After year 3, the margin will stabilize at year 3 levels forever. The...

  • 1.2.3.4. Fuji Co. is growing quickly. Dividends are expected to grow at a rate of 22...

    1.2.3.4. Fuji Co. is growing quickly. Dividends are expected to grow at a rate of 22 percent for the next three years, with the growth rate falling off to a constant 6 percent thereafter. If the required return is 12 percent and the company just paid a dividend of $3.25, what is the current share price? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Current share price You have found the following stock...

  • nment Saved The head of the accounting department at a major software manufacturer has asked you...

    nment Saved The head of the accounting department at a major software manufacturer has asked you to put together a pro forma statement of the company's value under several possible growth scenarios and the assumption that the company's many divisions will remain a single entity forever. The manager is concerned that, despite the fact that the firm's competitors are comparatively small, collectively their annual revenue growth has exceeded 50 percent over each of the last five years. She has requested...

  • 1. An annual coupon bond has a coupon rate of 5.4%, face value of $1,000, and...

    1. An annual coupon bond has a coupon rate of 5.4%, face value of $1,000, and 4 years to maturity. If its yield to maturity is 5.4%, what is its Modified Duration? Round to three decimal places. 2. A semi-annual coupon bond has MacD of 23.6 years, yield-to-maturity of 6.6%, and price of $1071.43. What is its DV01? Answer in dollars, rounded to three decimal places. 3. You own a bond portfolio worth $31,000. You estimate that your portfolio has...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT