The correct answer would be B. faster growth, with less saturation.
Answer:
The answer is $41.2
Explanation:
This will be solved by Dividend Discount Model which is one of the ways of valuing the price of shareholders' equity.
Here, the future value of dividend payment are discounted using the cost of equity.
Ke = D1/Po + g
Where Ke is the cost of equity
D1 is future dividend payment.
Po is the current share price or stock price
g is the growth rate.
To find the current price of stock price, we need to re write the equation;
Po = D1 ÷ (Ke - g)
D1 = Do x 1.03
= $2 x 1.03
=2.06
Ke = 8% or 0.08
g = 3% or 0.03
So we have;
2.06 ÷ (0.08 -0.03)
$2.06 ÷ 0.05
$41.2
Answer:
$71,644.27
Explanation:
Future value of the deposit in 19 years = Monthly deposit * [(1 + interest rate/12)^12*No. of years - 1] / (interest rate/12
= $90 * [(1 + 10%/12)^12*19 - 1] / (10%/12)
= $90 * [6.63346333924 - 1] / 0.008333
= $90 * 6.63346333924/0.008333
= $90 * 796.0474
= $71644.269835
= $71,644.27
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Answer:
Monthly withdraw= $206.28
Explanation:
Giving the following information:
Initial investment (PV)= $11,100
Interest rate (i)= 0.0437/12= 0.003642
Number of periods (n)= 5*12= 60 months
<u>To calculate the monthly withdrawal, we need to use the following formula:</u>
Monthly withdraw= (PV*i) / [1 - (1+i)^(-n)]
Monthly withdraw= (11,100*0.003642) / [1 - (1.003642^-60)]
Monthly withdraw= $206.28