Present value of a perpetuity

Assignment Help Financial Management
Reference no: EM131026242

Present value of a perpetuity

What is the present value of a $900 perpetuity if the interest rate is 3%? Round your answer to the nearest cent.

If interest rates doubled to 6%, what would its present value be? Round your answer to the nearest cent.

Reference no: EM131026242

Questions Cloud

Project on the sociology of shyness : At Cardiff University, Susie Scott has been conducting a doctoral research project on the sociology of shyness, an innovative topic for the sociological imagination. The study involved in-depth interviews and an email discussion group, both with p..
Why is one method more appropriate than another : Why is one method more appropriate than another for the recording of depreciation of a certain asset class?
The resistance of two coils of a wattmeter : The resistance of two coils of a wattmeter are 0.01 ohm and 1000 ohms respectively and both are non-inductive the load current is 20 A and the voltage across the load is 30 V. in one of the two ways of connecting the voltage coil, the error in the re..
Determine the joint probability function of y1 and y2 : Let Y1 denote the number of married executives and Y2 denote the number of never-married executives among the three selected for promotion. Assuming that the three are randomly selected from the nine available, find the joint probability function ..
Present value of a perpetuity : What is the present value of a $900 perpetuity if the interest rate is 3%? Round your answer to the nearest cent. If interest rates doubled to 6%, what would its present value be? Round your answer to the nearest cent.
What would be the total return of the bond in percentage : A 7.7 percent coupon bond with 15 years left to maturity is priced to offer a 6.35 percent yield to maturity. You believe that in one year, the yield to maturity will be 7.0 percent. What would be the total return of the bond in dollars? What would b..
Determine the present value of the bonds cash flows : The Garcia Company’s bonds have a face value of $1,000, will mature in 10 years, and carry a coupon rate of 16 percent. Assume interest payments are made semiannually. a. Determine the present value of the bond’s cash flows if the required rate of re..
What is the long-run equilibrium aggregate price level : You are also told that K equals 400 units of capital and L equals 625 units of labor.  In addition, the money supply equals 10,000 and the velocity of money is constant and equal to 1. What is the long-run equilibrium aggregate price level for this..
Capital gains-the tax effect of this transaction : A corporation is selling an existing asset for $21,000. The asset, when purchased, cost $10,000, was being depreciated under MACRS using a five-year recovery period, and has been depreciated for four full years. If the assumed tax rate is 40 percent ..

Reviews

Write a Review

Financial Management Questions & Answers

  Restructuring of operations a solution to operating exposure

Is restructuring of operations a solution to operating exposure-Operating exposure measures any changes in the present value of a firm resulting from changes in future operating cash flows caused by any unexpected change in exchange rates.

  Calculate the companys overall cost of capital

Calculate the companys overall cost of capital - What happens to the cost of equity as more debt gets used relative to equity?

  Find the size of the monthly payments

Joe secured a loan of $10,000 four years ago from a bank for use toward his college expenses. The bank charges interest at the rate of 3%/year compounded monthly on his loan. Now that he has graduated from college, Joe wishes to repay the loan by amo..

  What is the NPV of the project

You have been hired as a consultant for Pristine Urban-Tech Zither, Inc. (PUTZ), manufacturers of fine zithers. The market for zithers is growing quickly. The company bought some land three years ago for $1.35 million in anticipation o7 using it as a..

  What single annual rate of interest

Bill Christenson deposited $40,000 in his credit union on September 23, 1993. Recently, while going through some papers he discovered the account. How much should Bill have in this account on September 23, 2015? If Bill had invested in a twenty-two y..

  Describing a firms capital structure

(Describing a firm’s capital structure) Lowe’s Companies, Inc. (LOW) and its subsidiaries operate as a home improvement retailer in the United States and Canada. As of February 1, 2008, it operated 1,534 stores in 50 states and Canada. The company’s ..

  Zero coupon bonds have more reinvestment risk

10-year, zero coupon bonds have more reinvestment risk than 10-year, 10% coupon bonds. A 10-year, 10% coupon bond has less reinvestment risk than a 10-year, 5% coupon bond (assuming all else equal). The price of a 20-year, 10% bond is less sensitive ..

  What are the nal and irr of the lease-interpret each value

Big Sky Hospital plans to obtain a new MRI that costs $2.5 million and has an estimated four-year useful life. It can obtain a bank loan for the entire amount and buy the MRI or it can lease the equipment. What are the NAL and IRR of the lease? Inter..

  Thinking about buying some shares

An investor is thinking about buying some shares of Visual Metrics, Inc., at $75 a share. She expects the price of the stock to rise to $115 a share over the next three years. During that time, she also expects to receive annual dividends of $4 per s..

  Calculate the firms degree of financial leverage

Carolina Fastener, Inc., makes a patented marine bulkhead latch that wholesales for $6.18. Each latch has variable operating costs of $3.44. Fixed operating costs are $49,600.00 per year. Calculate Carolina Fastener’s operating breakeven point. Calcu..

  Total current asset is

She also has mortgage on condo for $97,500 of which $3,200 is payable during the current year. total current asset is?

  Experiencing rapid growth-what is the projected dividend

Momsen Corp. is experiencing rapid growth. Dividends are expected to grow at 26 percent per year during the next three years, 16 percent over the following year, and then 6 percent per year indefinitely. The required return on this stock is 12 percen..

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