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1. What is the value of a share of a firm's stock when the firm is expected to pay $2.80 per share dividend at the end of each year and the annual discount rate is 7.5 percent?

2. What is the present value of a lease on a warehouse, where the tenants have a lease that goes into perpetuity and have agreed to pay $300 at the end of each month of the lease with an annual discount rate of 8 percent?

3. Your company signed a 20-year lease for a new office. The lease requirement that your firm pay $1,000 at the end of each month over the life of the lease. If the current annual rate is a percent, what is the present value of this annuity stream?

4. Suppose you invest $800 in a mutual fund at the end of each year for the next 30 years and the fund earns an annual rate of return of 10 percent. What will be value of your retirement fund after 30 years?

5. You want to invest $200 at the end of each month until you have reached your goal of a total balance of $100,000. You plan to invest in an account that earns an annual rate of 8 percent. How many years will it take to earn the $100,000?

 

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M9205365

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