User Account

All Pages

What is present value of perpetuity

Assignment Help Financial Management
Reference no: EM131052282

After grad you worked on Wall Street made. Fortune & now wish to endow a professorship here at Morgan. You'd like endowment to pay 10000 forever. If appropriate interest rate is 6.7% what is the present value of perpetuity?

Reference no: EM131052282

Questions Cloud

Firm issued bonds several years ago : A firm issued bonds several years ago with a 8% coupon rate. Their bonds are currently trading for $950 in the market. Which of the following most likely has occurred since the time of issue?
Calculate the outstanding loan balance immediately : A loan is amortized over five years with monthly payments (i.e. end of month) at an annual nominal interest rate of 5% compounded monthly. The first payment is 500 and is to be paid one month from the date of the loan. Each succeeding monthly payment..
What is the bonds yield to maturity : Yield to maturity a bonds market price is $800. it has a !1,000 par value, will mature in 8 yrs, and has a coupon interest rate of 11 % annual interest, but makes its interest payments semi-annually. What is the bonds yield to maturity?
Explain how accounts payable affects external funds required : There is an expression that it is best to operate a business using “other people’s money.” Given that other people’s money is reflected in accounts payable, explain how accounts payable affects the external funds required (EFR).
What is present value of perpetuity : After grad you worked on Wall Street made. Fortune & now wish to endow a professorship here at Morgan. You'd like endowment to pay 10000 forever. If appropriate interest rate is 6.7% what is the present value of perpetuity?
What is the net cash flow of the project : Cochrane, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2,430,000. The fixed asset falls into the three-year MACRS class (MACRS Table). The project is estimated to generate $2,260,000 in a..
Entire balance in her account to invest in investment : Beverly Hills started a paper route on January 1, 2009. Every three months, she deposits $550 in her bank account, which earns 8 percent annually but is compounded quarterly. How much will she have on December 31, 2015? Use Appendix A and Appendix C ..
What were the other administrative expenses : The New Fund had average daily assets of $2.6 billion in the past year. New Fund’s expense ratio was 1.5% and the management fee was 1.0%. What were the total fees paid to the fund’s investment managers during the year? What were the other administra..
Common stock valuation problem : COMMON STOCK VALUATION PROBLEM The Fast-Growth Company recently paid a dividend of $3.20 per share. Analysts expect the dividend to grow at the rate of 28% per year for 3 years, then by 16% for 3 more years, before converging to the industry median g..

Reviews

Write a Review

Financial Management Questions & Answers

  What is queuing theory

What is queuing theory? Describe the different types of costs involved in a queuing system. In what areas of management can queuing theory be applied successfully

  Using the risk-adjusted discount rate approach

Using the risk-adjusted discount rate approach, the firm's weighted average cost of capital is applied to projects with: Select one: a. no risk b. low risk c. normal risk d. high risk

  Nominal rates of return

Large cap stocks had the nominal rates of return of 11.98%. The rate of inflation during the last year was 2.57 percent. What is the real rate of return for large cap stocks.

  Short-term financial planning

The PDC Company was described during the early part of this chapter. Refer to the PDC Company’s projected monthly operating schedules in Table 6.2. PDC’s sales are projected to be $80,000 in September 2014. Compare your balance sheet at the end of Au..

  How much can you withdraw from retirement plans

If you plan on making 20 equal withdrawals at the beginning of each year from the account (with the first withdrawal made at the end of the 30th year-the first year of retirement), how much can you withdraw?

  Case of a routine medical checkup for a pregnant woman.

Consider a case of a routine medical checkup for a pregnant woman. Suppose that a new ultrasound method is introduced. A checkup using the new method costs 10% more than a checkup using the old method.

  About the merger valuation

Harrison Corporation is interested in acquiring Van Buren Corporation. Assume that the risk-free rate of interest is 6% and the market risk premium is 8%. Harrison estimates that if it acquires Van Buren, the year-end dividend will remain at $2.80 a ..

  Retained earnings in determining the firms cost of capital

The Yo-Yo Corporation tries to determine the appropriate cost for retained earnings to be used in capital budgeting analysis. The firm’s beta is 1.98. The rate on six-month T-bills is 2.04%, and the return on the S&P 500 index is 8.82%. What is the a..

  Describe the active portfolio management process

Describe the active portfolio management process. Assuming you are a portfolio manager with similar portfolio allocation decisions as in the case, but today, in the current market conditions. Which stock you consider adding to your portfolio?

  Explain how corporate culture of local best buy store

Explain how the corporate culture of a local Best Buy store compares to that of a local McDonald's restaurant. Describe the corporate culture of the company you work for or, if you are a student, of Indiana University Northwest. How does this corpora..

  Determine the eoq-conditions stated above hold

P15–5 EOQ analysis Tiger Corporation purchases 1,200,000 units per year of one component. The fixed cost per order is $25. The annual carrying cost of the item is 27% of its $2 cost. Determine the EOQ if (1) the conditions stated above hold, (2) the ..

  Create a portfolio that has an expected return

You have $122,000 to invest in a portfolio containing Stock X, Stock Y, and a risk-free asset. You must invest all of your money. Your goal is to create a portfolio that has an expected return of 14 percent and that has only 72 percent of the risk of..

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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