What will be the value of her investment

Assignment Help Financial Management
Reference no: EM131323980

If a business manager deposits $60,000 in a bond fund at the end of each year for twentys years, what will be the value of her investment?

a) at a compounded rate of 6%

b) at a compounded rate of 4%

What would the outcome be in each case if the deposits were made at the beginning of each year?

Reference no: EM131323980

Questions Cloud

Estimate the total value of the firm and value per share : Do Pham is evaluating Phaneuf Accelerateur using the FCFF valuation approaches. Pham has collected the following information (currency in euro): Phaneuf has net income of 250 million, depreciation of 90 million, capital expenditures of 170 million, a..
Highest rate of return possible within their personal level : Financial planners (and engineering economists) unanimously encourage people to seek out the highest rate of return possible within their personal level of risk tolerance. Amount of Required Annual Deposit.... find this at each interest rate.
What is your estimate of the stocks price : It is projected that a firm’s next four annual dividends will be $0.50, $1.00, $1.50, and $1.75. After the fourth dividend, dividends are expected to grow at a constant annual rate of 7%. Assuming that the required rate of return for the stock is 16%..
Calculate the value of the Treasury note : Assume that a $1,000,000 par value. semiannual coupon U.S. Treasury note with two years to maturity (YTM) has a coupon rate of 5%. The yeild to maturity of the bond is 8.80%. Using this information and ignoring the other cosr involved, calculate the ..
What will be the value of her investment : If a business manager deposits $60,000 in a bond fund at the end of each year for twentys years, what will be the value of her investment?  What would the outcome be in each case if the deposits were made at the beginning of each year?
Bond is convertible into common stock : For each of the following characteristics which a bond may have, would their presence tend to increase or decrease the yield to maturity. The bond is convertible into common stock.
Toyota actions from a corporate governance perspective : Five months before the new 2002 Lexus ES hit showroom floors, the company's U.S. engineers sent a test report to Toyota City in Japan: The luxury sedan shifted gears so roughly that it was "not acceptable for production." Evaluate Toyota’s actions fr..
Treasury note with two years to maturity : Assume that a $1,000,000 par value. semiannual coupon U.S. Treasury note with two years to maturity (YTM) has a coupon rate of 3%. The yeild to maturity of the bond is 9.90%. Using this information and ignoring the other cosr involved, calculate the ..
Over-own-bond-yield-plus-judgemental-risk-premium approach : The earnings, dividends, and common stock price of Shelby Inc. are expected to grow at 8% per year in the future. Shelby's common stock sells for $20.25 per share, its last dividend was $2.00, and the company will pay a dividend of $2.16 at the end o..

Reviews

Write a Review

Financial Management Questions & Answers

  Expected to pay the dividends-what is current share price

Lohn Corporation is expected to pay the following dividends over the next four years: $20, $16, $15, and $8.50. Afterward, the company pledges to maintain a constant 5 percent growth rate in dividends forever. If the required return on the stock is 1..

  Plan to start saving for your retirement

Assume you will start working as soon as you graduate from college. You plan to start saving for your retirement on your 25th birthday and retire on your 65th birthday. After retirement, you expect to live until you are at least 85. You wish to be ab..

  What cost of capital would you recommend

Assuming an equity premium of 4% and a risk-free rate of 3%,  - what cost of capital would you recommend for 1 year of this firm's cash flows?

  Common characteristics of a tender offer

Which of these are common characteristics of a tender offer?

  Compute post-stock dividend price of complex computers stock

Show the company's common stockholders' equity after the stock dividend. Calculate the post-stock dividend price of Complex Computers stock, assuming no other changes occur.

  The yield to maturity at this price is closest to

Several years ago you purchased Mechheads LTD bonds. A recent price quote on the bonds is 93.50. The bonds have 5 1/2 years left to maturity and a coupon rate of 5 3/8%. The yield to maturity at this price is closest to: Show all steps in financial c..

  Prepare an amortization schedule for a five-year loan

Prepare an amortization schedule for a five-year loan of $69,000. The interest rate is 8 percent per year, and the loan calls for equal annual payments. Interest paid $ How much total interest is paid over the life of the loan?

  What is the net income under the worst-case scenario

Wilson’s Market is reviewing a project with sales of 6,200 units plus or minus 2 percent at a sales price of $29 plus or minus 1 percent per unit. The expected variable cost per unit is $11 plus or minus 3 percent and the expected fixed costs are $87..

  Proceeds from the sale plus the money in savings account

Ralph buys perpetuity immediate paying 60 annually. He deposits the payments into a savings account earning interest at an annual effective rate of 4%. Fifteen years later, after receiving the 15th payment, Ralph sells the perpetuity based on an effe..

  What is the growth rate if current period dividend

Suppose the current price of stock is $72. What is the growth rate if current period's dividend (Do) is $3 and the required rate of return on stock is 9.375%?

  Construct a bar graph for the relative frequencies

Construct a bar graph for the relative frequencies. Construct a pare to chart and explain the finding.

  Holders of equity capital

Holders of equity capital____.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd