Permanent insurance plans include various options available to the policyowner. What whole life insurance policy options protect
1 answer:
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Answer:
Value of stock today = $37.3738
Explanation:
Provided details we have,
Dividend just given = $2.10
Dividend at end of Year 1 = $2.10 + 11% = $2.331
Dividend at end of Year 2 = $2.331 + 11% = $2.5874
Dividend at end of Year 3 = $2.5874 + 11% = $2.872
Dividend at end of Year 4 = $2.872 + 11% = $3.188
Dividend in 5th year = $3.188 + 3.5% = $3.299
Value of share at end of 4th year =
= = $43.987
Therefore value of share today shall be:
Year Present Value factor @11% Return Present Value
1 0.9009 $2.331 $2.099998
2 0.8116 $2.5874 $2.099934
3 0.7311 $2.872 $2.0997192
4 0.6587 $3.188 $2.0999356
4 0.6587 $43.987 $28.9742
Net Present Value i.e. Value of stock today = $37.3738