Question
Investment X offers to pay you $7102 per year for 4 years at a discount rate of 5%, Investment Y offers to pay you $3560
Investment X offers to pay you $7102 per year for 4 years at a discount rate of 5%, Investment Y offers to pay you $3560 per year for 6 years at a discount rate of 1%. Investment Z offers to pay you $12000 per year for 2 years at a discount rate of 2%. Which of these cash flow streams has the higher present value?
Select one:
a.Investment Y
b.Investment X
c.Investment Z
d.Theyre all the same
A Corporation just paid a dividend of $7.86 per share. The company pledges to increase its dividend by 2.2 percent per year, indefinitely. If you require a return of 6 percent on your investment, how much will you pay for the companys stock today?
Select one:
a.$253.74
b.$211.34
c.$298.68
d.$206.84
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