1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
KatRina [158]
3 years ago
7

. You just inherited a trust that will pay you $100,000 per year in perpetuity. However, the first payment will not occur for ex

actly four more years. Assuming an 8 percent annual interest rate, what is the value of this trust?
Business
1 answer:
Aliun [14]3 years ago
4 0

Answer:

Present Value= $918,787.32

Explanation:

Giving the following information:

You just inherited a trust that will pay you $100,000 per year in perpetuity.

The first payment will not occur for exactly four more years.

Interest rate= 8%

First, we need to determine the value of the perpetual annuity in 4 years. Then, we calculate the value today.

Present value in four years:

PV= Cf/i

Cf= cash flow

PV= 100,000/0.08= $1,250,000

Now, using the following formula, we calculate the value today.

PV= FV/(1+i)^n

PV= 1,250,000/1.08^4

PV= $918,787.32

You might be interested in
In response to duracell's introduction of the duracell ultra battery, energizer introduced an advanced formula battery. but unli
erastovalidia [21]
No, because consumers equate quality of batteries with higher prices. With batteries consumers believe there is a price- quality relationship, it does not make the consumers, price insensitive. Also, there is no indication Energizer set a target price and adjusted cost and quality components to maintain wholesaler and retailer margins. 
6 0
3 years ago
If you see potential conflict you should
Ugo [173]

Try your best to break it up.. and call the police if it gets to out of hand.


Ps: I don't mess with the police just giving you the right answer #FTP

6 0
3 years ago
hudson corporation will pay a dividend of $2.80 per share next year. the company pledges to increase its dividend by 7.40 percen
trapecia [35]

Option d. $35.00 is the share price that one should pay for the stock today to get the required return

The share price, or the price you will pay for the company's stock right now, can be calculated using the necessary rate of return calculation, the formula is as follows:

RRR=(EDP/SP)+DGW

where;

RRR=required rate of return

EDP=expected dividend payment from share

SP=share price

DGW=dividend growth rate

In our case:

RRR=15.40%=15.4/100=0.154

EDP=$2.80

SP=unknown

DGW=7.40%=7.40/100=0.074

Substituting the values in the formula we get the following:

0.154=(2.80/SP)+0.074

(0.154-0.074)=(2.80/SP)

0.08=2.80/SP

SP=2.80/0.08

So, the share price of the stock=$35

Learn more about dividends:

brainly.com/question/28044310

#SPJ4

3 0
1 year ago
Globalization increases the interdependency of the world's countries. Inflation in one country would most likely
Lina20 [59]
The correct answer for the question that is being presented above is this one: "D. relate to inflation in other countries." Globalization increases the interdependency of the world's countries. Inflation in one country would most likely <span>relate to inflation in other countries.</span>
Here are the following choices:
<span>A. not impact inflation in other countries
B. cause deflation in other countries
c. result in stagflation in other countries
D. relate to inflation in other countries</span>
7 0
3 years ago
What is the setting of the story? “ Muffin Dragon”
yarga [219]

Answer:

A fire-breathing winged serpent adores crunching biscuits more than anything on earth, subsequently his name, the Muffin Dragon. An awesome anecdote about basic financial matters as it identifies with this mythical dragon and merciful yet poor people who live in a once-over mansion in the forested areas

Explanation:

Hope this Helps!

6 0
3 years ago
Other questions:
  • Akihabara Imports offers the widest selection of Japanese animation products available on the Internet.
    12·1 answer
  • Fresnas Inc. is a furniture manufacturing company. It has taken the initiative of incorporating social responsibility as one of
    15·1 answer
  • For many​ years, the International Nickel Company of Canadathe International Nickel Company of Canada essentially operated as a
    6·1 answer
  • For a given product, the optimal order quantity is 600 units, average annual demand is 12,000 units, the average lead time is 1
    15·1 answer
  • Lowering the costs is one of the objectives of the production and logistics function of an international firm. true or false
    11·1 answer
  • Higgs Enterprise's flexible budget cost formula for indirect materials, a variable cost, is $0.75 per unit of output. If the com
    11·1 answer
  • Safefen, a safety assurance and standards association in the country of Eilenst, made it mandatory for all the toy manufacturers
    15·1 answer
  • Suppose demand and supply are given by Qd = 60 - P and Qs = 1.0P - 20.
    8·2 answers
  • Walker was gathering information on plasma and LCD TVs because he wanted to purchase one for his household. He bought several el
    11·1 answer
  • Provide theoretical underpinnings of empirical findings in Wang (2018b) and Wang and Duxbury (2021).
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!