Question.4391 - Ch. 8 Written Assignment 1DetailsResolve the following problems (1, 5, 6, 9 from the book chapter). Show the calculations.1 . Steve purchases preferred stock in Berklee Corporation, with each share paying a $2.50 dividend. This dividend will remain constant. If the public’s required rate of return for Berklee stock is 8%, at what price should this company’s stock sell?5 . Debbie won the $60 million lottery. She is to receive $1 million a year for the next 50 years beginning one year from now, plus an additional lump sum payment of $10 million after 50 years. The discount rate is 10 percent. How much cash would she need to be offered today to tempt her to take a lump-sum cash offer instead, all things equal?6 . Kim started a paper route on January 1, 2016. Every three months, she deposited $300 in her new bank account, which earned 4 percent annually but was compounded quarterly. On December 31, 2019, she placed the entire balance in her bank account in an investment that earned 5 percent annually. How much will she have on December 31, 2022?9 . Jada is borrowing $40,000 from you today. She agrees to pay you back in annual installments beginning a year from now over eight years, with interest at 3%. What would her annual payment amount be, including both interest and principal?
Answer Below:
Ch xxxxxxx AssignmentQuincy xxxxxxxxxx - xxxxxxxxxx of xxxxxxx February xx Written xxxxxxxxxxxxxxxxx Preferred xxxxx price xxxxxx dividend xxxxxxxx rate xx return xxxxxxxxx stock xxxxx Preferred xxxxx price xxxxxxx In xxxx problem xxx million xxxxxx payment xxxxxx to xx annuity xxx its xxxxxxx value xxx be xxxxx using xxxx for xxxxx at xxxxxxx value xx annuity x Present xxxxx of xxxxxxx The xxxxxxx value xx million xx be xxxxxxxx after xxxxx will xx Present xxxxx of xxxxxxxx x x Present xxxxx of xxxxxxxx x xxxxxxx value xx lump-sum xx the xxxx she xxxxx need xx be xxxxxxx today xx tempt xxx to xxxx a xxxxxxxx cash xxxxx instead xxx things xxxxx will xx Cash xx be xxxxxxx today xxxxxxx value xx annuity xxxxxxx value xx lump-sum xxxx to xx offered xxxxx Cash xx be xxxxxxx today xxxxxxx In xxxx problem xx first xxxx to xxxxxxxxx the xxxxxx value xx the xxxxxxxxx deposits xx for xxx first xxxx years xx follows xxxxxx value x x xxxxxx value x Future xxxxx The xxxxxx of xx again xxxxxxxx at xx interest xxxx of xxxxxxxxxx annually xxx its xxxxx at xxx end xx the xxxxx years x e xxxxxxxx will xx as xxxxxxx Future xxxxx x xxxxxx value x Future xxxxx So xxx will xxxx on xxxxxxxx Problem xxxxxx Payment xxxxxxx value x r x -t xxxxxx Payment x - xxxxxx Payment x Annual xxxxxxx So xxxx s xxxxxx payment xxxxxxxxx both xxxxxxxx and xxxxxxxxx will xxMore Articles From FIN 320 91 - Principles of Finance
.ico)
.ico)
.ico)
.ico)
