1. When two companies form a joint venture and each company owns exactly 50% of the joint venture, both parents consolidate one half of the joint venture=True or False?
2. You are the CEO of a very popular social networking firm. You just announced that this year’s earnings are $1 billion. Analysts predict your earnings will grow at 20% each year for the next three years and then earnings growth will slow to 2% per year and will continue growing at 2% in perpetuity. Assuming r=8%, what is the present value of your future (not counting this year) projected earnings?