Expected to pay stream of dividends forever

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1. A house is expected to have a maintenance cost of $1000 the first year. It is believed that the maintenance cost will increase by $500 every year. The interest rate is 6% compounded annually. What will the equivalent uniform annual maintenance cost be over a 10-year period? 

2. Matina made deposits of $2,000 at the beginning of each year for four years. The rate she earned is 5% annually. What's the value of Martina's account in four years?

3. In the dividend-discount model, what is the equilibrium price of a stock that is expected to pay a stream of dividends (Div1,Div2,Div3...) forever?

Reference no: EM131955399

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