What should be the price of this stock assuming

Assignment Help Financial Management

Reference no: EM132025470

1. What is the present value of receiving $ 95.00 at the end of each year forever starting 6.0 years from now.

Assume the interest rate is 8.20% compounded annually.

2. Suppose a security is expected to produce end-of-year cash flows of $1,400.00 dollars starting 6.0 years from now and continuing until 37.0 years from now. What is the present value of this security? Use a discount rate of 16.00% compounded annually.

3. Suppose you want to buy a house that costs $100,000.00. The bank requires a 15.00% down payment and will charge 13.20% interest compounded monthly. Suppose you put down the least amount that you could and borrow the rest from the bank. If you made monthly payments to the bank for 20.0 years, how much would each payment be?

4. XYZ, Inc., just paid a dividend of $4.00. XYZ, Inc., is expected to increase their (year-end) dividend 6.00% each year forever. What should be the price of this stock assuming that the applicable discount rate is 16.00% compounded annually?

5. Judy and John wish to buy a house in the future. In order to get the favorable interest rate associated with at least a 20% down payment, they expect to need $30,000.00. Currently Judy and John have no money for a down payment. However, at the end of each month they plan to deposit a certain fixed amount into an account earning 9.00% interest compounded monthly. How much money must Judy and John save at the end of each month so they will have the necessary cash 5.0 years from now?

Reference no: EM132025470

Questions Cloud

What is the divisions decision on this project : what is continuation value in year 4 for cash flows after year 4? Calculate NPV of this project and what is the divisions decision on this project?

Progressive income tax system on earnings : The UK currently has a progressive income tax system on earnings. The rules are as follows. Any earnings under 11,500GBP are taxed at 0%.

Why is it important to explain trends in revenue : Why is it important to explain trends in revenue and in net income in a financial analysis?

Determine the value of the company equity : Use the flow to equity approach to determine the value of the company’s equity. What is the total value of the company?

What should be the price of this stock assuming : What should be the price of this stock assuming that the applicable discount rate is 16.00% compounded annually?

The account assuming you make no additional deposits : After 10.0 years, how much money will be in the account assuming you make no additional deposits or withdrawals to or from your account?

What are the projects irrs assuming the wacc : What are the projects' IRRs assuming the WACC is 10%? What are the projects' IRRs assuming the WACC is 15%?

Additional deposits or withdrawals to or from your account : Assume you make no additional deposits or withdrawals to or from your account.

Market value balance sheet before the new project : Benson, Athavale & Kemper (BAK) started a manufacturing facility in the last century. Construct a market value balance sheet BEFORE the new project.

User Account

All Pages