Sparkling water inc expects to sell 286 million bottles of, Ask an Expert

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Sparkling Water, Inc., expects to sell 2.86 million bottles of drinking water each year in perpetuity. This year each bottle will sell for $1.55 in real terms and will cost $.96 in real terms. Sales income and costs occur at year-end. Revenues will rise at a real rate of 5 percent annually, while real costs will rise at a real rate of 4 percent annually. The real discount rate is 14 percent. The corporate tax rate is 35 percent. What is the company worth today?

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Financial Management, Finance

Category:- Financial Management
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