1. Calculate the (present) value of an investment in a private business that has cash flow...

1. Calculate the (present) value of an investment in a private business that has cash flow of $50,000 per year, and is expected to earn at least this same amount per year for the “foreseeable future.” Assume your required rate of return, or discount rate is 30.0%.

2. Calculate the value of a BBB rated corporate bond that has a coupon rate of 5.0%, and 10 years to maturity. Current market interest rates for this grade of bond are approximately 4.0%. Is this a Premium, or a Discount bond?

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jeff jeffy answered 2 years ago

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