What is rate of return would you earn if you bought asset

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Reference no: EM131854284

1. Bill paid 10000 for an investment that promises to pay 750 at the end of each next 5 years then an additional lump sum of 12350 at the end of the 5th year. What's the expected rate of return on this invesment?

2. You are offeted a chance to buy an asset for 4500 that's expect to produce cash flows of 750 at the end of year 1 and 1000 at the end of year 2 and 850 at the end of year 3 and 3950 at the end of year 4. what's the rate of return would you earn if you bought this asset?

3. Janet is planning to purchase the stock of Mortensen Petro, Inc. She expects the stock to pay a $1.98 dividend next year, and she would sell the stock for $28 next year. If the required return of the stock is 12.5%, what is the (highest) price that she is willing to pay for the stock today?

Reference no: EM131854284

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