Considering the purchase of unit investment trust

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Reference no: EM131361123

Jed is considering the purchase of a unit investment trust (UIT) with a three-year life. The UIT promises a payment of $5,000 next year and the payments are expected to grow at 8% per year for the subsequent two years. If Jed’s required return on the investment is 9.5%, what should he be willing to pay for the UIT?

Reference no: EM131361123

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