What is present value of this annuity

Assignment Help Financial Management
Reference no: EM131354105

If you start making $205 monthly contributions today and continue them for four years, what is their future value if the compounding rate is 11.50 percent APR?

What is the present value of this annuity?

Reference no: EM131354105

Questions Cloud

Rate of return if state occurs : Rate of Return if State Occurs. Calculate the expected return for Stock A. Calculate the standard deviation for Stock B
Investor should pay for the common stock of firm : What would be the maximum an investor should pay for the common stock of a firm that has no growth opportunities but pays a dividend of $1.36 per year? The required rate of return is 12.5 percent.
Amount of the initial cash flow for expansion project : Jamestown Ltd. currently produces boat sails and is considering expanding its operations to include awnings. The expansion would require the use of land the firm purchased three years ago at a cost of $142,000 that is currently valued at $137,500. Wh..
What is the present value of his lifetime tax payments : Zach lives two periods. He ea rns $10,000 in the first period a nd nothing in the second period. The rate of return is 10 percent and there is an incom e tax (applied to labor and interest earnings) of 50 percent. What is Zach’s income tax liab ility..
What is present value of this annuity : If you start making $205 monthly contributions today and continue them for four years, what is their future value if the compounding rate is 11.50 percent APR? What is the present value of this annuity?
Market values of these comparable firms : The analyst should be careful not to mechanically add an acquisition premium to the target firm’s estimated value based on the comparable companies’ method if there is evidence that the market values of these “comparable firms” already reflect the ef..
What is company new cost of equity : Gamer Co. has no debt. Its cost of capital is 10.4 percent. Suppose the company converts to a debt–equity ratio of 1. The interest rate on the debt is 7.5 percent. Ignore taxes for this problem. What is the company’s new cost of equity? What is WACC?
Considering purchasing bonds with par value : Emma is considering purchasing bonds with a par value of ?$10,000. The bonds have an annual coupon rate of8?%and six years to maturity. The bonds are priced at $9,550. If Emma requires a 10?% return, should she buy these? bonds? If Emma requires a 10..
Portfolio expected return-money will you invest in stock : Portfolio Expected Return. You have $250,000 to invest in a stock portfolio. Your choices are Stock H, with an expected return of 12.9 percent, and Stock L, with an expected return of 9.8 percent. If your goal is to create a portfolio with an expecte..

Reviews

Write a Review

Financial Management Questions & Answers

  What is the cost of common stock for whitewall

Whitewall Tire Co. just paid an annual dividend of $1.35 on its common shares. If Whitewall is expected to increase its annual dividend by 3.00 percent per year into the foreseeable future and the current price of Whitewall’s common shares is $14.73,..

  Calculate earnings per share and EPS

Suppose a company has no debt outstanding and a total market value of $90,000. Earnings before interest and taxes, EBIT, are projected to be $8,000 if economic conditions are normal. If there is strong expansion in the economy, then EBIT will be 20 p..

  Using the perpetual growth method

Suppose the dividends for the Seger Corporation over the past six years were $3.04, $3.12, $3.21, $3.29, $3.39, and $3.44, respectively. Compute the expected share price at the end of 2014 using the perpetual growth method. Assume the market risk pre..

  Discuss the income taxation of retirement benefits

Explain and discuss the income taxation of retirement benefits, including required minimum distributions, inherited pension benefits, etc. Give some examples.

  What was the firms operating cash flow or OCF

The 2014 balance sheet of Sugarpova's Tennis Shop, Inc., showed long-term debt of $6.2 million, and the 2015 balance sheet showed long-term debt of $6.4 million. The 2015 income statement showed an interest expense of $215,000. What was the firm’s 20..

  What is the bonds effective annual yield

Rudy Sandberg wants to invest in 5-year bonds that are currently priced at $850.00. The bonds have a coupon rate of 10 percent and semiannual coupon payments. If the par value of the bonds is $1,000, what is the bond's effective annual yield (EAY)?

  Million shares of common stock outstanding

JackITs has 6.8 million shares of common stock outstanding, 2.8 million shares of preferred stock outstanding, and 38.00 thousand bonds. If the common shares are selling for $29.90 per share, the preferred shares are selling for $15.30 per share, and..

  Evaluate the proposed tightening of credit standards

Evaluate the proposed tightening of credit standards, and make a recommendation to the management of Jeans Manufacturing.

  Nominal cost of preferred equity adjusted for flotation cost

An issue of preferred stock pays a $1.42 dividend each quarter, and is currently trading at $94 per share. Flotation costs are estimated to be $0.86 per share. The nominal cost of preferred equity (Rp) adjusted for flotation costs, is %.

  What percentage of parts will not meet weight specs

Specifications for a part for a DVD player state that the part should weigh between 24.3 and 25.3 ounces. The process that produces the parts has a mean of 24.8 ounces and a standard deviation of .23 ounce. The distribution of output is normal. Use T..

  Dream job is political and community organizer

Dream house costs $1,724,000, dream job is political/community organizer which makes $72,000 per year. What is 20% of your dream home value (this is the down payment for your house) and what is 20% of your monthly income? How long will it take you to..

  According to the unbiased expectations theories

The Wall Street Journal reports that the rate on 9-year Treasury securities is 1.60 percent and the rate on 10-year Treasury securities is 2.15 percent. According to the unbiased expectations theories, what does the market expect the 1-year Treasury ..

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