How much will you receive each year from perpetuity

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Reference no: EM131923763

1. Seville Corporation has net assets of $4,896,000 and paid-in capital of $800,000. The only stock issue consists of 68,000 outstanding shares of common stock. From this information, it can be deduced that the company has:

A book value of $72 per share of common stock.

A book value of $11.76 per share of common stock.

Retained earnings of $4,896,000.

A deficit of $4,896,000.

2. You are going to pay $900 into an account at the end of each of the next 20 years. The account will then be left to compound (with no additinal contributions) for an additional 20 years. At the end of the 41st year you will begin receiving a perpetuity from the account. If the account pays 14%, how much will you receive each year from the perpetuity (round to nearest $10,000)?

A) $160,000 B) $150,000 C) $170,000 D) $140,000

Reference no: EM131923763

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