Lee corporation will generate earnings of $120,000 per year in perpetuity as long as no...
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Lee corporation will generate earnings of $120,000 per year in perpetuity as long as no investments are made. However one year from now Lee can invest $150,000 in a project that will generate income of $80,000 forever. Lee has 15,000 shares outstanding and the appropriate discount rate is %12. Calculate the price of Lee's stock assuming that investors know the firm has the investment available.
A) $66.66
B)$93.16
C) $94.12
D) $97.42
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