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A security is currently selling for $10,000 and promises to pay $1,500 annually for the next 10 years, and $1,000 annually in the 2 years
A security is currently selling for $10,000 and promises to pay $1,500 annually for the next 10 years, and $1,000 annually in the 2 years thereafter with all payments occurring at the end of each year. If your required rate of return is 7%, should you buy this security? Yes, because the return is greater than 7% Yes, because the return is 7% Yes, because the present value at 7% is less than $8,000. There is insufficient information provided to answer this question. No, because the return is less than 7%
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