Question
1. Assuming a discount rate of 5%, calculate the PV of a cash flow stream that pays $1,000 in three years and $2,000 in 9
1. Assuming a discount rate of 5%, calculate the PV of a cash flow stream that pays $1,000 in three years and $2,000 in 9 years.
2. Assuming a required rate of return (discount rate) of 8%, what is the value of a common share with an expected perpetual stream of annual dividends, with the first dividend of $8.00 to be received in one year and with all subsequent dividends growing at a rate of 3%?
3. What is the PV of a stream of annual cash flows, with the first cash flow of $500 to be received in one year, the second cash flow of $600 in two years and the third and final cash flow of $700 to be received in three years? Assume a discount rate of 9%.
4. What is the FV of $12,000 invested at 10% (compound interest) in 45 years?
(Please show me how to use financial calculator to do those questions)
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