Answer:
4%
Explanation:
The Gordon constant growth dividend model =
Value = dividend / cost of capital - growth rate
Subsisting with the values given in the question gives :
25 = 2.5/0.14 - g
To solve for g,
1. multiply both sides by 0.14 - g
25(0.14 -g) = 2.5
2. divide both sides by 25
0.14 - g = 0.10
g = 0.04 = 4%
Answer:
$4872.48
Explanation:
future value = amount x annuity factor
Annuity factor = {[(1+r)^n] - 1} / r
r = 4% - 3% = 1%
1200 x [(1.01)^4 - 1] / 0.01 = $4872.48
Answer:
Cheap Florida Auto Insurance. Low Rates from $53.99 / Month!
Explanation:
Answer: 29.93%
Explanation:
You can use Excel to solve for this.
Bear in mind that when given a series of cashflows, the expected return is the Internal Rate of Return (IRR).
Initial investment = $32
First cashflow = $1.25
Second cashflow = $1.31
Third cashflow = $1.38 + $65 selling price = $66.38
IRR = 29.93%