Answer:
They should invest $5,119,047.619 today.
Explanation:
The trust fund will pay a fixed amount forever thus it is a perpetuity. The value of perpetuity or Price of perpetuity is the amount that the perpetuity is worth in today's terms based on the cash flows it will generate in future.
The formula for the value or price of perpetuity is,
P0 or V = Cash Flow / r
Thus,
P0 or V = 215000 / 0.04 = $5,119,047.619
Answer:
See explanation section
Explanation:
The difference between buying shares and buying bonds are as follows:
1. Buying stock gives a person to own the company while buying a bond that provides a person to become a debt-holder of the company who can receive interest and get the entire amount in the future.
2. Purchasing stock gives an individual the voting right to elect the board of directors of a company. Buying bonds does not give voting rights to the bondholders.
3. Stock owners can receive the profit in the name of dividends. Bondholders do not receive any profit. Instead, they receive interest annually.
In order to run your buissnes
Answer:
Net cash flow from Operating activities $ 97,000.00
Explanation:
The problem can not be solved on the answer box here, that is why i made use of the microsoft word table in other to understand the solution properly
