What is the payback period of a perpetuity

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1. What is the discount factor for a cash flow received in 10 periods if the discount rate is 8%?

2. What is the payback period of a perpetuity that pays $100 per year and costs $1670 to buy?

3. A bond pays coupons semiannually. The time to maturity is 15 years, the face value is $1,000, and the coupon rate is 8%. If you buy the bond, what is the cash flow that you will receive in six months? What will be the payment at the end of 15 years?

4. Salesforce.com is expected to pay a dividend of $5 per share next year, and this dividend is expected to grow at a constant rate forever. The appropriate discount rate for Salesforce.com's equity is 18%. If Salesforce.com's stock price is $35, what is the expected growth rate for the firm's dividends?

Reference no: EM131669372

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