Homework answers / question archive / 1) (Present value of a growing? perpetuity)  What is the present value of a perpetual stream of cash flows that pays ?$4,500 at the end of year one and the annual cash flows grow at a rate of 4?% per year? indefinitely, if the appropriate discount rate is 15?%? What if the appropriate discount rate is 13?%?   2)   A company is expected to pay a dividend of $3

1) (Present value of a growing? perpetuity)  What is the present value of a perpetual stream of cash flows that pays ?$4,500 at the end of year one and the annual cash flows grow at a rate of 4?% per year? indefinitely, if the appropriate discount rate is 15?%? What if the appropriate discount rate is 13?%?   2)   A company is expected to pay a dividend of $3

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1) (Present value of a growing? perpetuity)  What is the present value of a perpetual stream of cash flows that pays ?$4,500 at the end of year one and the annual cash flows grow at a rate of 4?% per year? indefinitely, if the appropriate discount rate is 15?%? What if the appropriate discount rate is 13?%?

2) 

 A company is expected to pay a dividend of $3.25 per share

next year (t=1) and the dividend is expected to grow at a constant rate forever. The stock is currently selling for $42. If the required rate of return is 10 percent, what is the dividend growth rate?

3) 

If you borrow 700,000 to buy a home, what do you suppose your monthly payment will be? Suppose a 30-year mortgage and a fixed 7% interest rate.

If you invest $1500 each year for 35 years, how much will you have at the end of 35 years assuming a 10% annual rate?