dividends are 10,5,6,8, 10 with 5 years. interest rate is 12. what is the future value...

dividends are 10,5,6,8, 10 with 5 years. interest rate is 12. what is the future value of the stock

Expert Solution

Future value of stock = Sum [ Cash flow * FVF(r%, n) ]

Year	Bal Yrs	Cash flow	FVF @12%	FV of CFs
1	4	$ 10.00	1.5735	$ 15.74
2	3	$ 5.00	1.4049	$ 7.02
3	2	$ 6.00	1.2544	$ 7.53
4	1	$ 8.00	1.1200	$ 8.96
5	0	$ 10.00	1.0000	$ 10.00
FV of CFs				$ 49.25

Future Value of stock is $ 49.25

jeff jeffy answered 3 years ago

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