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The solutions are in parenthesis. Need help solving 3,4,and 6 with step by step solutions and using a financial calculator.

1. The fair rate is 8%. What is 100 per year, forever, worth now? (1250)

2. What is the same 100 per year worth if it only lasts for 15 years? (855.948)

3. What if the 100 was paid yesterday, and we expect it to grow at 5% forever? (3500)

4. What if it were to grow at 5% for 15 years, then end? (1206.22)

5. Castle Black Camping is twice as risky as the average stock. The market should earn 11% and the risk free rate is 2%. What is a fair return for CBC? (20%)

6. Harlan County Safety Co. has a beta of 1.2. Form a portfolio that is half HCSC and half CBC (from number 5). What is a fair return? (16.4%)

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92826074

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