If you are willing to pay $46,868.00 today to receive $4,481.00 per year forever then your required rate of return must be ____%. Assume the first payment is received one year from today.
Value of perpetuity=Annual payments/required rate of return
46,868=4481/required rate of return
required rate of return=(4481/46,868)
which is equal to
=9.56%(Approx).
If you are willing to pay $46,868.00 today to receive $4,481.00 per year forever then your...
If you are willing to pay $46,850.00 today to receive $4,341.00 per year forever then your required rate of return must be ____%. Assume the first payment is received one year from today. If you are willing to pay $20,509.00 today to receive a perpetuity with the first payment occurring next year then the payment must be $______. Assume a 7.00% discount rate. What discount rate would make you indifferent between receiving $3,727.00 per year forever and $5,271.00 per year...
If you are willing to pay $44,793.00 today to receive $4,189.00 per year forever then your required rate of return must be ____%. Assume the first payment is received one year from today. If you are willing to pay $29,453.00 today to receive a perpetuity with the first payment occurring next year then the payment must be $______. Assume a 15.00% discount rate. What discount rate would make you indifferent between receiving $3,526.00 per year forever and $5,610.00 per year...
1. What is the value today of receiving $2,422.00 per year forever? Assume the first payment is made next year and the discount rate is 12.00%. 2. What is the value today of receiving $1,429.00 per year forever? Assume the first payment is made 6.00 years from today and the discount rate is 4.00%. 3. If you are willing to pay $42,377.00 today to receive $4,353.00 per year forever then your required rate of return must be ____%. Assume the...
What is the value today of receiving $2,593.00 per year forever? Assume the first payment is made 8.00 years from today and the discount rate is 6.00%. Submit Answer format: Currency: Round to: 2 decimal places. unanswered not_submitted #4 If you are willing to pay $49,200.00 today to receive $4,333.00 per year forever then your required rate of return must be ____%. Assume the first payment is received one year from today. Submit Answer format: Percentage Round to: 2 decimal...
If you are willing to pay $26,549.00 today to receive a perpetuity with the first payment occurring next year then the payment must be $______. Assume a 14.00% discount rate.
If you are willing to pay $22,605.00 today to receive a perpetuity with the first payment occurring next year then the payment must be $ . Assume a 6.00% discount rate. Answer Format: Currency: Round to: 2 decimal places. Enter Answer Here... Submit Answer
Your grandparents would like to establish a trust fund that will pay you and your heirs $160,000 per year forever with the first payment one year from today. If the trust fund earns an annual return of 3.1 percent, how much must your grandparents deposit today?
Please show your work An investment promises to pay you $7,000 per year forever with the first payment today. If alternative investments of similar risk earn 1% per year, determine the maximum you would be willing to pay for this investment Enter your response below (rounded to 2 decimal places).
14) b) The British government has consol bonds (perpetuities) outstanding that pay £100 per year, forever. Assume that the current discount rate is 4%. What is the value of the bond today in £, if the last payment was made yesterday? What is the value of the bond today in £, if you will receive the first payment today? Assume an ordinary perpetuity. If this consol trades in the market today at £2,480, what rate of return will an investor...
a. A company promises to pay you, and your descendants, $400 per year forever. Your required rate of returm is 10 percent. What is the most you would pay for this perpetuity? PV-Payment/Interest rate b. Future Value: If you deposit $12,000 in the bank today, what will it be worth in 15 years at9 percent compound growth? What is the formula for this problem? c. Present Value: If you plan to receive $12,000 from the bank in 15 years, what...