Question
PLEASE SHOW WORKING A. An investment opportunity will yield $8,000 at the end of one year. If your required rate of return is 8% p.a.,
PLEASE SHOW WORKING
A. An investment opportunity will yield $8,000 at the end of one year. If your required rate of return is 8% p.a., then the maximum price that you should be willing to pay for this investment opportunity today is $________.
B. Assume you deposit $800 per year beginning one year from today (t = 1) until 15 years from today (t = 15) into an account earning 3%. You will have $_____ in your account right after you make the last deposit.
c.You are offered a fixed annual payment of $285 starting one year from today and continuing yearly until forever. If the discount rate is 7% p.a., then the value today of these cash flows is $________.
D, Apple Inc. will pay out a dividend of $8.50 one year from today. The market believes the dividend will grow at a constant rate of 4% each year every year. If the required rate of return of Apples stock is 18%, Apples stock price is $________.
E. Google will not pay out a dividend for two years (t=1 and t=2). For the next two years, they will pay out a dividend of $6.00 per share (t=3 and t=4). The dividend will grow at a rate of 5% per year every year after this. If the required rate of return of Googles stock is 22%, Googles stock price is $________.
F, Google will not pay out a dividend for two years (t=1 and t=2). For the next two years, they will pay out a dividend of $6.00 per share (t=3 and t=4). The dividend will grow at a rate of 5% per year every year after this. If the required rate of return of Googles stock is 22%, Googles stock price is $________.
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