a. A financial asset generates returns of $10,000 at the end of each year for ten years. The required rate of return if 7% per year. How much must you pay to buy this asset?

Exercice 4:

b. A stock pays a constant dividend of $10, starting at the beginning of year 6 (t=6). What is the present value today of the perpetuity if the required rate of return is 20%?

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jeff jeffy answered 2 years ago

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Question

a. A financial asset generates returns of $10,000 at the end of each year for ten years. The required rate of return if 7% per year. How much must you pay to buy this asset?

Solutions

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