1, What is the present value of an annual $718 perpetuity if the interest rate is...
1, What is the present value of an annual $718 perpetuity if the interest rate is 3.48% compounded annually?
Please round your answer to the second decimal without dollar sign. E.g. 1.11
2, You purchased a stock at $79 and sold the stock for $86 one year after. Just before you sold the stock, you received the dividend payment of $2.37 for the share you held from the company. What is your holding period return?
Please round your answer to the fourth decimal. If your answer is 1.11%, then you should input "0.0111".
* HPR can be positive or negative. If it's negative, do not ignore the negative sign.
Homework Answers
1.Present value of perpetuity=Annual cash flows/interest rate
=718/0.0348
=20632.18(Approx)
2.Holding period return=(End value-Beginning value+Dividend)/Beginning value
=(86-79+2.37)/79
=0.1186(Approx)
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