What is the present value of the technology if the discount


Growing Perpetuities. Mark Weinstein has been working on an advanced technology in laser eye surgery. His technology will be available in the near term. He anticipates his first annual cash flow from the technology to be $200,000, received two years from today. Subsequent annual cash flows will grow at 5 percent, in perpetuity. What is the present value of the technology if the discount rate is 10 percent? If the business is completely funded with equity, how much is the equity worth? If Weinstein held 50 percent of shares outstanding, how much would his shares be worth?

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Financial Management: What is the present value of the technology if the discount
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