What is the present value of the annuity

Assignment Help Financial Management

Reference no: EM131072132

A nine-year annuity that makes 36 quarterly payments of $6,700 will begin 6 years from now with the first payment coming 6.25 years from now. If the discount rate is 4.5 percent compounded quarterly, what is the present value of the annuity?

Reference no: EM131072132

Questions Cloud

Stock valuation with non-constant growth : Stock valuation with non-constant growth: M&M Co. just paid a dividend of $5.00 per share. The company will increase its dividend by 15 percent next year and will then reduce its dividend growth rate by 5 percentage points per year until it reaches t..

Evaluating investment project will have installed cost : Harper Jones is evaluating an investment project will have an installed cost of $518,297. The cash flows over the 4-year life of the investment are projected to be $287,636, $203,496, $63,024 and $92,556, respectively. What is the NPV of this project..

What is the project year zero net cash flow : Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.7 million. The fixed asset will be depreciated straight-line to zero over its three-year tax life, after which time it will be worth..

What is its cost of common equity and its WACC : Patton Paints Corporation has a target capital structure of 25% debt and 75% common equity, with no preferred stock. Its before-tax cost of debt is 11% and its marginal tax rate is 40%. The current stock price is P0 = $33.50. The last dividend was D0..

What is the present value of the annuity : A nine-year annuity that makes 36 quarterly payments of $6,700 will begin 6 years from now with the first payment coming 6.25 years from now. If the discount rate is 4.5 percent compounded quarterly, what is the present value of the annuity?

Share dividend on its common stock : Stewart Industries just paid a $3.00 per share dividend on its common stock yesterday (i.e., D0 = $3.00). The dividend is expected to grow 20 percent a year for the next four years, after which time the dividend is expected to grow at a constant rate..

What is the current value of stock : Honey Bee common stock is expected to pay $1.85 in dividends next year, and te market price is projected to be $40 by year end. Of the investor's required rate of return is 12 percent, what is the current value of the stock?

What is one share of this stock worth at rate of return : DC Motors recently paid $1.10 as its annual dividend. Future dividends are projected at $1.06 $1.02, and $1.00 over the next three years, respectively. After that, the dividend is expected to decrease by 2 percent annually. What is one share of this ..

Should the change to wire transfers be made : Pronet has an annual sale of $724 million from its 600 retail stores. Pronet can reduce its mail float by 2 days through the use of wire transfers. The annual cost of the wire transfers is expected to be $105,610. If Pronet's cost of short term funds..

User Account

All Pages