Question
A pays an expected cashflow of 10 at time 1, 3, 5, and 10. Then, A pays an expectedcashflow of 20 at time 11, 12,
A pays an expected cashflow of 10 at time 1, 3, 5, and 10. Then, A pays an expectedcashflow of 20 at time 11, 12, 13, 14,... (perpetuity). the rate is 11.4%
Compute the price of security A at time 10+ (PA,10+)
Remark: The notation t+ stands for time t right after cashflows have been paid.
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Personal Finance
Authors: Jeff Madura, Hardeep Singh Gill
4th Canadian edition
134724712, 134724713, 9780134779782 , 978-0134724713
