Question
You are considering buying a share of stock which you expect to pay a dividend at the end of each of the next five years.
You are considering buying a share of stock which you expect to pay a dividend at the end of each of the next five years. As soon as you receive the last dividend, you plan to sell the stock. The dividends and expected selling price are shown in the table below. Use the required return in the table as your discount rate
9.99% | Required return | |||||
Year | 0 | 1 | 2 | 3 | 4 | 5 |
Expected Selling Price | $10.00 | |||||
Dividend | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | |
Total Cash Flow | ??? | ??? | ??? | ??? | ??? | |
inflow | inflow | inflow | inflow | inflow |
What is this investment worth in today's money?
Enter your answer as a number with four decimal places but without the currency symbol, like this: 90.1234
You plan to deposit amounts as shown at the end of this year, and at the end of every year until five year from now, into a bank which will give you annual interest. The following table shows your deposits and timing. The interest rate is at the top of the table:
8.9% | Interest | |||||
Years to wait | 0 | 1 | 2 | 3 | 4 | 5 |
Cash flow | 500 | 500 | 500 | 500 | 500 |
What will be your bank balance at the end of the fifth year?
Enter your answer as a number with four decimal places but without the currency symbol, like this: 90.1234
You plan to deposit amounts as shown at the end of this year, and at the end of every year until five year from now, into a bank which will give you annual interest. The following table shows your deposits and timing. The interest rate is at the top of the table:
8.9% | Interest | |||||
Years to wait | 0 | 1 | 2 | 3 | 4 | 5 |
Cash flow | 500 | 500 | 500 | 500 | 500 |
What will be your bank balance at the end of the fifth year?
Enter your answer as a number with four decimal places but without the currency symbol, like this: 90.1234
You are considering buying a share of stock which you expect to pay a dividend at the end of each of the next five years. As soon as you receive the last dividend, you plan to sell the stock. The dividends and expected selling price are shown in the table below. Use the required return in the table as your discount rate
10.00% | Required return | |||||
Year | 0 | 1 | 2 | 3 | 4 | 5 |
Expected Selling Price | $10.00 | |||||
Dividend | $1.00 | $1.00 | $1.00 | $1.00 | $1.00 | |
Total Cash Flow | ??? | ??? | ??? | ??? | ??? | |
inflow | inflow | inflow | inflow | inflow |
What is this investment worth in today's money?
Enter your answer as a number with four decimal places but without the currency symbol, like this: 90.1234
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