Question
A firm decides to pay total dividends of $100,000 in period 1 and $471,000 in period 2. Charlie owns 10% of the firm and has
A firm decides to pay total dividends of $100,000 in period 1 and $471,000 in period 2. Charlie owns 10% of the firm and has no other wealth or income. What is Charlie's maximum period 2 consmption (C2) if he plans to consume only $1,000 in period 1 (C1)?
The market rate of return is 10%.
| $47,100 | ||
| $52,819 | ||
| $50,810 | ||
| $57,000 | ||
| $58,100 |
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Focus On Personal Finance
Authors: Jack R. Kapoor, Les R. Dlabay Professor, Robert J. Hughes, Melissa Hart
5th Edition
0077861744, 978-0077861742
