Two growing perpetuities has the same yield rate

Assignment Help Financial Management
Reference no: EM131553335

Two growing perpetuities has the same yield rate. the first one: a perpetuity-immediate, has an initial payment of 1000 one year from now. and each subsequent annual payment increases by 100. The present value of this perpetuity is 10000. The second perpetuity, also a perpetuity-immediate- has a present value of 6000, an initial payment of 500 one year from now and each subsequent annual payment increases by g%. Find g. A. 8.05 B. 7.85 C. 7.75 D. 7.95 E. 8.15

Reference no: EM131553335

Questions Cloud

Should samuel short or long forward contract : Should Samuel short or long a forward contract for 500,000 Singapore dollars and has 90 days left to maturity?
Define the future value : At age 35 you invest $1,600 that earns 11.5 percent per year. In which case would you have more money at age 60?
Find the interest contained in the installment : Find the interest contained in the installment due 5 years before the last installment.
Interest-on-interest : Interest-on-Interest Consider a $2,000 deposit earning 6 percent interest per year for 5 years.
Two growing perpetuities has the same yield rate : Two growing perpetuities has the same yield rate. the first one: a perpetuity-immediate, has an initial payment of 1000 one year from now.
The time-weighted rate of return : On December 31, the fund balance is 1600. X is the time-weighted rate of return.
How much money will the investment banker earn on the sale : How much money will the investment banker earn on the sale?
What is the minimum investment yield the company requires : What is the minimum investment yield the company requires to earn a 4% profit?
Interest tax shield from non-concessionary loan : Calculate the PV of interest tax shield from non-concessionary loan. Calculate the amount of funds that will be freed up by the new project.

Reviews

Write a Review

Financial Management Questions & Answers

  What is the after-tax cost of debt for this firm

You are analyzing the after-tax cost of debt for a firm. You know that the firm’s 12-year maturity, 10.40 percent semi-annual coupon bonds are selling at a price of $1,189.84. These bonds are the only debt outstanding for the firm. YTM: 7.92%. What i..

  How much would it be willing to lend business owner

A small business owner visits her bank to ask for a loan. The owner states that she can repay a loan at $1,200 per month for the next three years and then $2,400 per month for two years after that. If the bank is charging customers 8.00 percent APR, ..

  What is the companys cost of equity

The Down and Out Co. just issued a dividend of $2.66 per share on its common stock. The company is expected to maintain a constant 7 percent growth rate in its dividends indefinitely. If the stock sells for $55 a share, what is the company's cost of ..

  Did the depreciate or appreciate relative

Erin McQueen purchased 50 shares of BMW, a German stock traded on the Frankfurt Exchange, for 64.5 Euros (€) per share exactly 1 year ago when the exchange rate was 0.67 €/US$. Today the stock is trading at 71.8 (€) per share, and the exchange ..

  What is pretax cost of debt-aftertax cost of debt

Shanken Corp. issued a 30-year, 6 percent semiannual bond 4 years ago. The bond currently sells for 95 percent of its face value. The company's tax rate is 35 percent. What is the pretax cost of debt? What is the aftertax cost of debt?

  Market index is well-diversified portfolio

APT: Say a given market index (M) is a well-diversified portfolio and has an expected return of 15%. What is your profit per dollar invested?

  Describe various forms of internal and external threats

Describe various forms of internal and external threats to an organization. Describe methods to detect internal and external threats to the organization. Evaluate methods to protect the organization from internal and external threats.

  What amount must this person now commit to the membership

What amount must this person now commit to the membership?

  Next net cash flow by using exponential smoothing approach

Suppose that your firm's last net cash flow equaled $50,000 and the last forecast for net cash flow was $65,000. Given an alpha of 0.4, what is the forecast for the next net cash flow by using an exponential smoothing approach? Suppose that your firm..

  What is the stock beta

If the risk free rate of return is 4% and the expected return on the market portfolio is 12%, what is the stock's beta?

  What will the annual cash flow be

If you put up $41,000 today in exchange for a 6.75 percent, 14-year annuity, what will the annual cash flow be?

  Company capital structure weights on market value basis

Dinklage Corp. has 5 million shares of common stock outstanding. What are the company’s capital structure weights on a market value basis?

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