Solution-Compute annual savings to be deposited each year

Compute annual savings to be deposited each year

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Reference no: EM132531539

Q.1) Mr. Ahmed is trying to determine the value of ABC Company's common stock. The earning growth rate over his planned 5 year holding period is estimated to be 8%, and the dividend payout ratio is 60%. The ending P/E ratio is expected to be 15 time and current earnings per share are $4. If the required rate of return of this stock is 16%, what should be the price of ABC stock?

q2) Mr. Ahmed would like to have an annuity of Rs.50,000 per year for 20 years when he retires in 25 years right now. If the rate of interest is 12 percent per annum on investment then how much will Mr. Ahmed need to save and invest at end of each year into achieve his objective

q3) An investor wants to get Rs.1,500,000 after end of 5th year from now, for purchase of house. The rate of interest is 14% per annum on fixed deposit account. How much amount should he deposit in fixed deposit account each year in order to get the total amount Rs.1,500,000 at end of 5th year.

Required: Compute annual savings to be deposited each year, if the amount is deposited in fixed deposit account at , assume;

a) Beginning of each year.

b) End of each year.

Reference no: EM132531539

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Compute annual savings to be deposited each year

Reference no: EM132531539

Reference no: EM132531539

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