Determine the net cash flow at the end of year

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Reference no: EM132070626

Emmy Noether owns stock with a current market price of $100500. The stock pays a dividend at the end of each year that is equal to 3% of the stock's price at the beginning of the year.

For tax-related reasons, Dr. Noether does wish to sell the stock at this time. She decided to enter into a five-year total return equity swap, exchanging her position in the stock for fixed annual payments at a rate of 3% for five years. Over the five year period, the end-of-the-year market prices of the stock were as follows:

bullet $100250 at the end of the first year

bullet $101500 at the end of the second year

bullet $102000 at the end of the third year

bullet $101000 at the end of the fourth year

bullet $99500 at the end of the fifth year

Determine the net cash flow (from Dr. Noether's perspective) at the end of year 5.

The net cash flow at the end of year 5 is $

Reference no: EM132070626

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