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Tcecarenko [31]
4 years ago
14

A three-year annuity-immediate will be issued a year from now with annual payments of 5,000. Using the forward rates, calculate

the present value of this annuity a year from now.
Business
1 answer:
vladimir1956 [14]4 years ago
6 0

Answer:

13,152.5

Explanation:

Given the the above parameters as mentioned in the question

To calculate the PV (Present Value)

We have PV = 5000 * 1.05 * [ 1/(1.0575)² + 1/(0.625)³ + 1/(1.065)⁴]

PV = 5000 * 1.05 * (0.8942094350 + 0.8337064929 + 0.7773230908) =

=> PV = 5000 * 1.05 * 2.5052390187

= 13,152.50

Therefore, in this case, using the forward rates, the present value of this annuity a year from now is 13,152.50

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The preferred stock of a company pays a $2.75 quarterly dividends. If the preferred stockholders' required return is 7.25% for t
Sonbull [250]

Answer:

$151.72

Explanation:

Quarterly dividends of preferred stock = $2.75

Annual dividend of preferred stock = 4 * Quarterly dividend

Annual dividend of preferred stock = 4 * $2.75

Annual dividend of preferred stock = $11

Required return = 7.25% = 0.0725

Return = Dividend / Current price

0.0725 = $11 / Current price

Current price = $11 / 0.0725

Current price = 151.724138

Current price = $151.72

So, the preferred stock should sell for $151.72.

4 0
3 years ago
A jewelry firm buys semiprecious stones to make bracelets and rings. The supplier quotes a price of $8.90 per stone for quantiti
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Answer:

MOST LIKELY it's B

Explanation:

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7 0
3 years ago
Georgina decides to take a dozen cupcakes to school to sell so she can raise money for her school trip to New Orleans. She price
Lerok [7]

The situation described refers to an economic imbalance.

Economic imbalance is an economic term that refers to:

  • The scenarios in which an economy does not show an equilibrium between two magnitudes that belong to it. For example:

The economic imbalance commonly occurs when the supply of a product or service and its demand are not balanced, on the contrary, they suffer variations that alter the market equilibrium.

According to the above, Georgina experienced this phenomenon (economic imbalance) with her idea of selling cupcakes at her school because the supply (12 cupcakes) greatly exceeded the demand for cupcakes from her schoolmates (3 cupcakes).

Learn more in: brainly.com/question/12414419

4 0
2 years ago
A company can purchase a maintenance, repair, and operation (mro) package that might include services from different vendors, bu
ANEK [815]

Answer:

This packaging is an example of a <u>"horizontal market".</u>

Explanation:

A businesses in Horizontal Markets have an expansive and assorted set of clients and it is available in extensive variety of industries. In horizontal market, business sells to different industries. we can consider business of coffee an example of horizontal market as we know that many people from different countries drinks coffee.

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Which of the following are necessary for production to take place?
WINSTONCH [101]

Answer:

The input of land, labor, and capital. APEX

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