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Assume a two period perfect certainty world. A firm has the following investment opportunities: Period 1 Period 2 Project Outlay Return 100,000 120,000 150,000 182,000
Assume a two period perfect certainty world. A firm has the following investment opportunities: Period 1 Period 2 Project Outlay Return 100,000 120,000 150,000 182,000 200,000 226,000 300,000 333,000 The firm has an initial endowment of $500,000 and the market rate of return is 10.00%. Assuming that the firm faces no capital constraints and pay no dividend in period 1, what is the dividend available for distribution in period 2 if it decides to undertake all projects
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