What is the current value of the annuity

Assignment Help Financial Management
Reference no: EM131051638

A 6-year annuity of twelve $5,400 semi-annual payments will begin 11 years from now, with the first payment coming 11.5 years from now. If the discount rate is 7 percent compounded monthly, what is the value of this annuity five years from now? If the discount rate is 7 percent compounded monthly, what is the value three years from now? If the discount rate is 7 percent compounded monthly, what is the current value of the annuity?

Reference no: EM131051638

Questions Cloud

An investor has two bonds in his portfolio : An investor has two bonds in his portfolio that both have a face value of $1,000 and pay a 6% annual coupon. Bond L matures in 18 years, while Bond S matures in 1 year. What will the value of the Bond L be if the going interest rate is 4%? What will ..
What is the maximum level of accounts : What is the maximum level of accounts receiable that ALei can carry and have a 40 day average collection period? If ALei's current accounts receivable collection period is 50 days, how musch would it have to reduce its level of accounts receivable i..
Similar bonds with no allowance for inflation : What effect do you think the inflation-adjusted interest rate has on the cost of an I-bond in comparison with similar bonds with no allowance for inflation?
Relation to a corporate environment : Describe the selected topic in relation to a corporate environment. Analyze the roles and responsibilities in making these decisions for the organization. Explain how to monitor their performance.
What is the current value of the annuity : A 6-year annuity of twelve $5,400 semi-annual payments will begin 11 years from now, with the first payment coming 11.5 years from now. If the discount rate is 7 percent compounded monthly, what is the value of this annuity five years from now? If th..
What critical step international marketing research process : In which of the following approaches to international marketing does a firm grant a foreign-based company the right to use its intellectual property in return for the payment of royalties, fees, or some other form of payment?
Read several current business periodicals : Read several current business periodicals or search online to find information about the latest court rulings on benefits, affirmative action, and other human resource issues. Summarize your findings. Is there a trend in these decisions?
Annual dividends-dividends are projected to increase : Diets For You announced today that it will begin paying annual dividends next year. The first dividend will be $0.12 a share. The following dividends will be $0.15, $0.20, $0.50, and $0.75 a share annually for the following 4 years, respectively. Aft..
Question regarding the imputation tax system : A firm in Australia earns a pretax profit of $A10 per share. It pays a corporate tax of $A3per share (30% tax rate) in taxes. The firm pays the remaining $A7 in dividends to ashareholder in 35% tax bracket.

Reviews

Write a Review

Financial Management Questions & Answers

  Treasury issue-previous days asked price in dollars

Locate the Treasury issue in Figure 7.4 maturing in November 2028. Assume a par value of $10,000. What is its coupon rate? What is its bid price in dollars? What was the previous day’s asked price in dollars?

  Market value ratios

Ratios are mostly calculated based on the financial statements of a firm. Taggart Goods Corp. just reported a net income of $5,000,000, and its current stock price is $23.00 per share. Taggart is forecasting an increase of 25% for its net income next..

  The various states or the federal government

Which level of government do you think should regulate the insurance industry, the various states or the federal government? Explain your reasoning.

  What is the new par value per share

The company with the common equity accounts shown here has declared a 4-for-one stock split when the market value of its stock is $33 per share. The firm’s 80-cent per share cash dividend on the new (post split) shares represents an increase of 25 pe..

  Comprehensive understanding of the financial environment

Compare and appraise theories that underlie current thinking in Corporate Finance and Investment, demonstrate and evaluate how these theories can be applied in practical situations,

  Semi-annual coupons is sold to yield a nominal interest rate

A 6 year 1500 par bond with 5% semi-annual coupons is sold to yield a nominal interest rate f i convertible semi-annually. If the discount for the bond is 150, calculate i.

  Addition to price-weighted and value-weighted indexes

In addition to price-weighted and value-weighted indexes, an equally weighted index is one in which the index value is computed from the average rate of return of the stocks comprising the index.

  Compute present values of the options expiring

Assume sigma=0.15, nu=0.10, and current stock price $32. Monthly interest rate is 1%. Compute present values of the following options expiring in 3 months. (a) A European call option with strike $30, assuming $2 dividend in 40 days. (b) European put ..

  What is the present value of the perpetuity

What is present value of perpetuity of $100 per year with first payment started 5 years from today if appropriate discount rate is 5%? If discount rate is increased to 15% what is the present value of the perpetuity?

  What is value per share of stock after the acquisition

Moore Industries has agreed to be acquired by Scott Enterprises for $23,137 worth of Scott Enterprises stock. Scott Enterprises currently has 7,479 shares of stock outstanding at a price of $27.53 a share. Moore Industries has 1,886 shares outstandin..

  What are clovis average accounts receivable balances

Clovis Industries had sales in 2010 of $40 million, 20 percent of which were cash. If Clovis normally carries 45 days of credit sales in accounts receivable, what are its average accounts receivable balances?

  Compare the assumptions underlying arbitrage pricing theory

Compare the assumptions underlying Arbitrage Pricing Theory with those underlying the mean-variance Capital Asset Pricing Model. Which set of assumptions seems more realistic to you? Why?

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