Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

What is the future value of an initial $700 after 4 years, if I/YR = 4.5%? O $724.21 O $1001.12 $634.27 O $834.76 O $874.77

image text in transcribedimage text in transcribed

What is the future value of an initial $700 after 4 years, if I/YR = 4.5%? O $724.21 O $1001.12 $634.27 O $834.76 O $874.77 The only value a stock really has is its ability to generate cash for the shareholder. We have to do is figure out how much all those dividend payments are going to be and discount them back to their present value. All those dividend payments happen in the future. We have to make a few assumptions. First, there're (Select] of dividend payments. Second, we look at the company's history to come up with a growth rate of the [Select] expected to change each year. Finally, we need to know how much we're going to [Select] the value of those future are payments so we can figure out their present value

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Personal Financial Planning For Executives And Entrepreneurs

Authors: Michael J. Nathanson, Jeffrey T. Craig, Jennifer A. Geoghegan, Nadine Gordon Lee, Michael A. Haber, Seth P. Hieken, Matthew C. Ilteris, D. Scott McDonald, Joseph A. Salvati, Stephen R. Stelljes

1st Edition

3030405273, 978-3030405274

More Books

Students also viewed these Finance questions

Question

What is fuzz? Explain Zinssers notion of fuzz with a few examples.

Answered: 1 week ago