Interest rate-perpetual stream

Assignment Help Financial Management
Reference no: EM13877707

Given an interest rate of 7.05 percent per year, what is the value at Year 11 of a perpetual stream of $3,800 payments that begin at Year 18? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)

Reference no: EM13877707

Questions Cloud

What is the present value of this growing perpetuity : You are evaluating a growing perpetuity product from a large financial services firm. The product promises an initial payment of $24,000 at the end of this year and subsequent payments that will thereafter grow at a rate of 0.03 annually. If you use ..
Local finance company quotes interest rate on year loan : A local finance company quotes a 17 percent interest rate on one-year loans. So, if you borrow $25,000, the interest for the year will be $4,250. Because you must repay a total of $29,250 in one year, the finance company requires you to pay $29,250/1..
Earnings per share for next year assuming the firm raises : As the Financial vice president for Bear Enterprises, you have the following information: Expected net income after tax next year before new financing : $60,000,000. Sinking Fund payments due next year on existing debt: $20,000,000. Calculate Bear's ..
The theory of purchasing power parity : The theory of purchasing power parity
Interest rate-perpetual stream : Given an interest rate of 7.05 percent per year, what is the value at Year 11 of a perpetual stream of $3,800 payments that begin at Year 18?
What is the market price of one of the firms new bonds : Western Equipment Company will issue 30-year, semiannual bonds with an 8.0% coupon rate and a $1,000 par value. Bonds of similar risk and maturity are currently selling to yield 7.0% in the market place. What is the market price of one of the firm's ..
What is the profitability index of the project : Conch Republic Electronics is a midsized electronics manufacturer located in Key West, Florida. The company president is Shelly Couts, who inherited the company. The company originally repaired radios and other household appliances when it was founde..
How much can you withdraw each year in your retirement : You are planning your retirement in 10 years. You currently have $162,000 in a bond account and $602,000 in a stock account. You plan to add $7,800 per year at the end of each of the next 10 years to your bond account. How much can you withdraw each ..
Celebrate the end of your risk management-insurance class : You drink 5 beers to celebrate the end of your risk management and insurance class, then have an accident while driving home from the bar. The police charge you with drunk driving, and with hitting another automobile from behind. The exclusion of flo..

Reviews

Write a Review

Financial Management Questions & Answers

  Benefits consultant reviewing disability coverages offered

You are benefits consultant reviewing the disability coverage’s offered by one of your client firms. The disability plan of the firm offers provides short-term benefits equal to 100% of salary for 3 full years and long-term lifetime benefits equal to..

  Lose on this transaction assuming no hedging

You are the vice president of finance for Exploratory Resources, headquartered in Huston, Texas. In January 2010, your firm's Canadian subsidiary obtained a six-month loan of 150,000 Canadian dollars from a bank in Houston to finance the acquisition ..

  What is the stocks current rate of value per share

GROWTH VALUATION Thomas Brothers is expected to pay a $0.50 per share dividend at the end of the year. The dividend is expected to grow at a constant rate of 7% a year. The required rate of return on the stock, rs, is 15%. What is the stock’s current..

  What is the current stock price

Pasqually Mineral Water, Inc., will pay a quarterly dividend per share of $1.20 at the end of each of the next 12 quarters. Thereafter, the dividend will grow at a quarterly rate of 1.8 percent, forever. The appropriate rate of return on the stock is..

  Discuss pros and cons of financing in unhedged eurodollars

Discuss the pros and cons of financing in unhedged Eurodollars instead of via Euro euros. As you do this you must give consideration to the foreign exchange risks associated with financing in Eurodollars.

  Constant dividend-return on your equity investments

Leslie's Unique Clothing Stores offers a common stock that pays an annual dividend of $2.10 a share. The company has promised to maintain a constant dividend. How much are you willing to pay for one share of this stock if you want to earn a 12.60 per..

  Federal funds are important sources of liquidity

Repurchase agreements and federal funds are important sources of liquidity. The cost of using these markets spiked after Lehman Brothers failed.

  The contract size for platinum futures

The contract size for platinum futures is 50 troy ounces. Suppose you need 500 troy ounces of platinum and the current futures price is $1,265 per ounce. How many contracts do you need to purchase? How much will you pay for your platinum? What is you..

  Whats the accounts receivable investment

Determine the projects cash flows for years t=0 to t=10 and what's the accounts receivable investment How many times a year will the firm turn over its inventory?

  Fund all the aforementioned expenses and our retirement

We want to retire in 40 years, and we shall need $45,000 income per annum during our retirements which will last 35 years. We can save $20,000 annually during the first 9 years. We would like to know what the pension fund should be to finance our ret..

  Fixed retirement income that has same purchasing power

Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $55,000 has today. You borrow $..

  Newly formed retirement fund

Suppose that you are the manager of a newly formed retirement fund. You are to set up a series of semiannual payments to accumulate a sum of $1,000,000 in ten years. What is the required semiannual payment, to the nearest dollar? Suppose that immedia..

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