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iogann1982 [59]
3 years ago
13

You are evaluating a growing perpetuity investment from a large financial services firm. The investment promises an initial paym

ent of $2,176 at the end of this year and subsequent payments that will grow at a rate of 3.4 percent annually. If you use a 9 percent discount rate for investments like this, what is the present value of this growing perpetuity?
Business
1 answer:
Brilliant_brown [7]3 years ago
8 0

Answer:

the present value of this growing perpetuity is $83,692.31

Explanation:

The computation of the present value of this growing perpetuity is shown below:

present value of this growing perpetuity is

= Payment at end of this year ÷ (Discount rate - Growth rate)

= $2,176 ÷ (0.09-0.034)

= $83,692.31

Hence, the present value of this growing perpetuity is $83,692.31

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cricket20 [7]

Answer:

If the yield to maturity remains at 8%, then the bond's price will decline over the next year.

Explanation:

When the bonds sells at a premium it means that the coupon payment is greater than the yield to maturity, which means that the income generated by the bond is greater than return required by the investor and because of this the bond sells at a premium because the investor is willing to pay more for the bond as it offers more income than its required rate of return. With a premium the bond price increases to a point where the coupon and required return become equal. When the bond has 10 years to maturity it means that it will give 10 equal payments to the investor which will be greater than the investors required return therefore the investor will be willing to pay a higher price for the bond, as the maturity decreases the number of payments which will be higher than the required return also decrease, so for example if there are 5 years to maturity then the bond will pay 5 payments that are greater than the required return so the investor will be paying a lower premium compared to when he was getting 10 payments that payed more than his required return.

8 0
3 years ago
In which ways can goals be classified
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this is the correct answer

Explanation:

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3 years ago
On an organization's board of directors, Multiple Choice inside directors must work for the organization and outside directors a
ch4aika [34]

Answer:

Inside directors may be members of the firm and outside directors are supposed to be elected from outside the firm.

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A board of directors in most corporations consists of inside directors and outside directors. Inside directors are usually the members of the firm and have direct access to the company's operating. CEO, CFO and CIO are typical examples of inside directors. On the other hand, outside directors are not employees of the firm, nor stakeholders. They have unbiased opinions in board meetings.

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3 years ago
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djyliett [7]

Answer:

The answer is intensive distribution strategy.

Explanation:

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Answer:

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3 years ago
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