Angela is trying to fins a company 's Terminal value of assets based on the...
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Finance
Angela is trying to fins a company 's Terminal value of assets based on the perpetuity with growth, discoounted y weighted average cost of capital (WACC). The company's home country is forecast to have 3% real GDP growth and 2% inflation for the foreseeable future. Which of the below statement is not correct? The company's terminal value perpetuity growth rate:
A. in nominal terms must be less than equal to the country's 5% approxiamte nomianl GDP nominal rate, or else the company will eventually take over the country.
b. In real terms must be less than or equal to the country's 3% real GDP growth rate, or else the company will eventually take over the country
c. Must be zero in nomral terms if the firm's cash flow are forecast to grow by 2% in real terms
d. must be less than the firm's WACC or else the perpetuity formula will give a negative price (though the company will be worth an infinite amount)
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