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(Future Value of a Complex annunity) Springfield mogul Montgomery Burns, age 75, wants to retire at 100 so he can steal candy from babies full time. Once Mr. Burns retires, he wants to withdraw $1.2 billion at the beginning of each year for 5 years from a special offshore account that will pay 21 percent annually. In order to fund his retirement, Mr. Burns will make 25 equal end-of-the-year deposits in this same special account that will pay 21 percent annually. How much money will Mr. Burns need at age 100, and how large of an annual deposit must he make to fund his retirement account?
a. If the retirement account will pay 21 percent annually, how much money will Mr. Burns need when he retires?
Answer: $____ billion (round to three decimal places)
b. How large of an annual deposit must he make to fund this retirement account?
Answer: $____ million (Round to two decimal places)
Imagine a corporation with $1,000,000 of assets and a debt ratio of 40%. ROE (return on equity) is expected to be 20% for the foreseeable future. Assume the firm keeps the same amount of debt indefinitely (as opposed to keeping the same debt ratio).
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A bond of the Eastold Corporation pays an 11% coupon and has a $1000 par value. The coupon is paid semi-annually (twice a year). The bond matures in 10 years. The market's required yield to maturity on a comparable-risk bond is 9%. Calculate the valu..
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Therefore, discuss the various types of healthcare financing options for the for-profit and not-for-profit healthcare organizations. Next, add-in the advantages/disadvantages for each, but first from the investor's perspective, and then from the issu..
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In light of the Enron, Worldcom, option back dating, government bailouts/nationalizations and Madoff scandals, do you think U.S. equity markets are cleaner and more reliable than stock markets in the rest of the world?
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