Annuities, Corporate Finance

Assignment Help:
You are considering the purchase of a deferred annuity that will pay $10,000 a year at the end of each year for 20 years, to you or a desgnated survivor. (sure thing) Payments will begin when you turn 65, your current age is 55. If you feel 7% annual interest rate is a fair return, what is the maximum amount you should pay for the annuity today?

Related Discussions:- Annuities

Evaluate the capital structure, Question: (a) According to Modigliani a...

Question: (a) According to Modigliani and Miller's Theory of Capital Structure (1963), companies should make maximum use of gearing. Briefly, describe factors which might pr

Explain the negotiation of letter of credit in trade finance, Judges Maurit...

Judges Mauritius Co Ltd imports spare parts for cars from Dubai on a letter of credit basis, payable 60 days from ‘bill of lading' issue date. Each letter of credit is valid for 90

Calculate the expected effective real rate of return, Question : (a) D...

Question : (a) Describe how cash flows are exchanged in an "interest rate swap". (b) A government issues a 90-day Treasury Bill at a simple rate of discount of 5% per annu

Find net payment of the company, a)    Black Corp. currently has $65 millio...

a)    Black Corp. currently has $65 million worth of floating rate debts carried at an average rate of LIBOR + 2.6% that it would like to hedge against rising interest rates withou

Why the discount rate equals opportunity cost of capital, Question: (a)...

Question: (a) Describe why the discount rate equals opportunity cost of capital? (b) "Nominal rate less inflation rate is equal to real rate of return" - Is it true? Why or

Growthg and assets, a firm wishes to maintain an internal growth rate of 6....

a firm wishes to maintain an internal growth rate of 6.5% and the dividend payout ratio of 25%. The current profit margin is 6%, and the firm uses no external financing sources. Wh

Banks, discuss in detail various sources ffom wherebabks can borrow funds w...

discuss in detail various sources ffom wherebabks can borrow funds within India

Ranking projects: NPV vs IRR Conflicts, how can i rank a project when there...

how can i rank a project when there are conflict between IRR & NPV

Preview division - forecasting methods, Preview division divides M proporti...

Preview division divides M proportional to preview demand, i.e., each SKU n 2N gets fraction This method is included because it is used by the case company, in combination

Stock index options, Explain with proof that c >= max(S - X, 0), where c is...

Explain with proof that c >= max(S - X, 0), where c is the value of the European call option, S is the price of the underlying asset and X is the strike of the option. The follo

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd