Annual retirement income to increase each year

Assignment Help Financial Management

Reference no: EM132003233

1. Mary earns $100,000 per year. She plans to retire in 10 years and will live for 25 years after retiring. She can earn 8% on her money and inflation will average 3% per year. Using the capital depletion approach, how much will Mary need on the day she retires to fund her retirement if she wants her annual retirement income to increase each year to match inflation?

$1,723,295

$1,612,297

$1,810,293

$1,537,294

2. A preferred stock that pays a constant dividend of $1.20 currently sells for $16.00. What is the required rate of return?

A. 7.5%

B. 9.8%

C. 12.4%

D. 14.0%

Reference no: EM132003233

Questions Cloud

Assuming no market imperfections or tax effects exist : Assuming no market imperfections or tax effects exist, what will the share price be after:

Find future values of these ordinary annuities : Find the future values of these ordinary annuities. Compounding occurs once a year.

What is the current price of the stock : The required return is 10%. What is the current price of the stock?

Stock with constant dividend growth rate : A stock with a constant dividend growth rate of 5% is expected to make a $2 dividend in one year.

Annual retirement income to increase each year : how much will Mary need on the day she retires to fund her retirement if she wants her annual retirement income to increase each year to match inflation?

Statements regarding stock trading : Which of the following statements regarding stock trading is INCORRECT?

The total annual coupon income : You buy a TIPS at issue at par for $1,000. The total annual coupon income you will receive in year 3 is _________.

Cash flows at the start of a proposal : For cash flows at the start of a proposal, do you note down the accounts receivables/ payables at the start of the cash flow or over the life of the plan

What is the required rate of return on the bond : You bought a 30 year treasury bond that was issued two years ago. The face value is 500$ and sells at 106.50$. What is the required rate of return on the bond?

User Account

All Pages