What is the highest price you should be willing to pay

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Q1. The last dividend paid by BizStart ordinary shares was $5.49, and the expected growth rate is 10.4%. If you require a rate of return of 17.4%, what is the highest price you should be willing to pay for this share?

Q2. Calculate the payback period of an investment which will require a cash outlay of $101525 but is expected to generate cash inflows of $26415 a year?

Q3. Mia buys a $878 bond paying interest twice yearly at 9% p.a. and redeemable in 15 years. Her desired yield is j2=10%. After 9 years she sells the bond to yield the buyer j2=9%. Find the selling price.

Q4. A preference share pays a $17 dividend annually. If money is worth 13% p.a., what should an investor consider paying for this stock?

Q5. You decide to buy a property as an investment for $20260 and expect a resulting net cash flow of $6802 a year over the next 4 years. If your desired rate of return is 12.3% p.a. effective, what would the resulting NPV?

Reference no: EM132596544

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