Should you invest in stock


Question: Airtek Corp. expects growth in earnings of 7% per year for 10 years and then level earnings forever. Its income last year was $5 million. It has estimated its weighted average cost of capital is 10%. The firm has $31 million in debt and 500,000 shares outstanding. The stock is currently selling for $90 per share. Should you invest in stock? Why or why not?

 

 

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