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What constant payment for the next 10 years (starting 1 year from now, 10 payments) would be equivalent to receiving $450 every other year starting 10 years from now. Assume the annual cost of capital is 15%.

Suppose you own two assets with the following payouts. (1) $800 at the end of every year starting 1 year from now. The annual cost of capital for these cash flows is 6%. (2) $200 one year from now and a cash flow that is 3% larger than the prior cash flow every year thereafter. The annual cost of capital for these cash flows is 12%. What is the weighted average cost of capital of this two asset portfolio? (enter your answer as a percent, e.g. 2.51. Do not include the "%" sign).

Financial Management, Finance

  • Category:- Financial Management
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