How much will that be in 10 years if the inflation rate aver

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Reference no: EM133378660

You are planning for retirement in 10 years.

Question 1) If you estimate that you will need the equivalent of $100,000 per year in today's dollars base on your current budget, how much will that be in 10 years if the inflation rate averages 4% per year?

Question 2) How much would you need to have invested to generate the equivalent income for 25 years if inflation averages 2.5% per year after you retire, and your investments average 8% per year?

Question 3) Suppose a firm has 2 million shares of common stock outstanding, currently trading at $13 per share, and total debt with a market value of $60 million, and no other sources of funds. The required return for their stock is 11% and the pretax interest rate for their debt is 5%. If the marginal tax rate of the firm is 20%, compute the weighted average cost of capital of the firm.

Reference no: EM133378660

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