What is value of the common stock

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Reference no: EM132032788

1. The 3-year MACRS depreciation allowances are 33.33 percent, 44.45 percent, 14.81 percent, and 7.41 percent, respectively. What is the depreciation expense in year 2 for an asset with an initial cost of $87,000?

2. A stock paid $2.64 in dividends at the end of last year and is expected to pay a cash dividend until infinity. Each year the dividends are expected to grow by 6.6%. Investors require a 9% rate of return. What is value of the common stock?

3. Larry is starting his retirement fund by investing $12,000 into an IRA today. He plans to invest $12,000 a year for the next 25 years. If the IRA can earn 6.5% annual interest, about how much will be in Larry's IRA at the end of 25 years?

$300,000

$1,010,730

$829,882

$752,584

Reference no: EM132032788

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