A common stock will pay a cash dividend of $3 mext year. After that, the dividends are expected to increase indefinitely at 4% per year. If the discount rate is 9%, what is the PV of the stream of dividend payments?

The $56 million lottery prize that you have just won actually pays out $10.0 million a year for 20 years. The interest rate is 10.0%.

a. If the first payment comes after 1 year, what is the present value of your winnings?

b. What is the present value of the first payment comes immediately?