Question
An investment project that requires immediate costs of $200 generates revenues of $242 at the end of the first year. What is its annual internal
An investment project that requires immediate costs of $200 generates revenues of $242 at the end of the first year. What is its annual internal rate of return ...
(a) if the interest is compounded annually? i1 = ______________%
(b) if the interest is compounded twice a year? i2 = _______________%
(c)if the interest is compounded continuously? r = ln(______________)
B. Company's share costs $100. In one next year it will pay a dividend of $10. The dividend will continue being paid yearly and it will grow by 5% per year (i.e. $10, $10.5, $11.025, ...). What is the annual internal rate of return on this share?
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