What is the maximum price that you should pay

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Problem - You are considering making an investment in a securitized video sharing website named 'DogeHub', which pays a steady cash flow of $695 to its investors every 7 months in perpetuity. If you invest today you will be just in time to receive the next of those $695 payments tomorrow. You have found another very similar investment to the one you are considering (in terms of its risk characteristics, etc.) that has a weekly-compounded discount rate of 18.0% APR. You have decided that this discount rate appropriately reflects the compensation you want for the risk you will be taking in DogeHub.

A) Given the above information, what is the maximum price that you should pay today in order to invest in 'DogeHub'?

Reference no: EM132861168

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