Find present value of the perpetuity

Assignment Help Financial Management
Reference no: EM131487575

A perpetuity has payments of 1, 1, 2, 1, 1, 3, 1, 1, 4,... Payments are made at the end of each year. Assuming an annual effective interest rate of 5%, find the present value of the perpetuity.

Reference no: EM131487575

Questions Cloud

Coupon payments are semiannual and that yield-to-maturity : "Altria has 6% coupon 20 year bond (par value = 1,000). Assume that coupon payments are semiannual and that yield-to-maturity is 5%. What is the price of bond?
High-precision components for the shipbuilding industry : Fairfax Group was founded in 1993 as a manufacturer of critical electronics and high-precision components for the shipbuilding industry.
What is the value of a european swap option : What is value of European swap option that gives holder right to enter into 3year annual-pay swap in four years where fixed rate of 5% is paid-LIBOR is received
Risk-free securities in the united states : What is the yield on 180-day risk-free securities in the United States?
Find present value of the perpetuity : Assuming an annual effective interest rate of 5%, find the present value of the perpetuity.
Organization save each month by refinancing : How many years will it take the organization to recover the up-front fees? how much will the organization save each month by refinancing?
Jack oyster barn shows you financial statements : jack's oyster barn Shows you financial statements that reflect 1 million of total assets and 100,000 of liabilities and 500,000 in equity. You conclude..
Define three tax issue : estimation of the cost of the advertisement and marketing for the aforementioned period and then submit the estimates to HP.
Calculate the return on invested capital for each firm : Firms HL and LL are identical except for their financial leverage ratios and interest rates they pay on debt. Calculate return on invested capital each firm.

Reviews

Write a Review

Financial Management Questions & Answers

  Explain how a companys permanent working capital need differ

Explain how a company's permanent working capital needs differ from its seasonal working capital needs.

  You are the beneficiary of a life insurance policy

You are the beneficiary of a life insurance policy. The insurance company informs you that you have two options for receiving the insurance proceeds. You can receive a lump sum of $50,000 today or receive payments of $641 a month for ten years. You c..

  What is the present value of interest tax shield

If a firm borrows permanently $25 Million at an interest rate of 7%, what is the present value of the interest tax shield? If a firm borrows $25 Million for one year at an interest rate of 8%, what is the present value of the interest tax shield? (As..

  What is the cash flow to stockholders-operating cash flow

Zigs Industries had the following operating results for 2011: sales = $31,140; cost of goods sold = $20,160; depreciation expense = $5,580; interest expense = $3,090; dividends paid = $1,850. At the beginning of the year, net fixed assets were $17,18..

  What is minimum number of shares you need to own to ensure

The shareholders of the Pickwick Paper Company need to elect five directors. There are 150,000 shares outstanding. What is the minimum number of shares you need to own to ensure that you can elect at least one director if the company has majority vot..

  What are some ways that a firm can harm

What are some ways in which a firm can improve its cash position - what are some ways that a firm can harm its cash position?

  Involves simultaneously borrowing and lending activities

The spot and 30 day forward rates for the Dutch guilder are $.3075 and $.3120, respectively. The guilder is said to be selling at a forward. A ________ involves simultaneously borrowing and lending activities in two different currencies to lock in th..

  Calculate stream of expenses possible with assumed income

Using a hypothetical situation, make calculations to assist in retirement planning (e.g., determine stream of savings necessary for certain standard of retirement). Calculate the stream of expenses possible with the assumed income.

  Two mutually exclusive projects-cash flow

Mahjong, Inc., has identified the following two mutually exclusive projects: Year Cash Flow (A) Cash Flow (B) 0 –$36,900 –$36,900 1 19,260 6,760 2 14,760 13,260 3 12,260 19,760 4 9,260 23,760. If the required return is 15 percent, what is the NPV for..

  What is the price of treasury strips with face value

What is the price of a Treasury STRIPS with a face value of $100 that matures in 12 years and has a yield to maturity of 10.0 percent?

  Pays a nominal interest rate

You must make a payment of $1,619.01 in 10 years. To get the money for this payment, you will make 5 equal deposits, beginning today and for the following 4 quarters, in a bank that pays a nominal interest rate of 6% with quarterly compounding. How l..

  What is probability that vargo will have operating losses

What is the probability that Vargo will have operating losses? How large could the additional fixed costs from the new equipment be without affecting the breakeven point?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd