« previous next »

Author Question: What is the present value of a series of 5,000 end-of-the-year cash flows to be received forever if ... (Read 14 times)

cartlidgeashley

  • Hero Member
  • *****
  • Posts: 572
on: Jul 11, 2018
What is the present value of a series of 5,000 end-of-the-year cash flows to be received forever if the required rate of return is 6.00 per year and the first cash flow is one year from today?
 
  A) 8,333.33
  B) 83,333.33
  C) 300.00
  D) This question cannot be answered because there is no time period provided.

Question 2

Green Company stock has a beta of 2 and a required return of 23, while Gold Company stock has
  a beta of 1.0 and a required return of 14. The standard deviation of returns for Green Company is
  10 more than the standard deviation for Gold Company.
 
  The expected return on the market
  portfolio according to the CAPM is
  A) 9. B) 14. C) 10. D) 12.


Expo

  • Sr. Member
  • ****
  • Posts: 351
Reply #1 on: Jul 11, 2018
Answer to Question 1

B
Explanation: B) PV = PMT/r = 4,000/.06 = 83,333.33

Answer to Question 2

B


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

In most cases, kidneys can recover from almost complete loss of function, such as in acute kidney (renal) failure.

Did you know?

Asthma occurs in one in 11 children and in one in 12 adults. African Americans and Latinos have a higher risk for developing asthma than other groups.

Did you know?

People with alcoholism are at a much greater risk of malnutrition than are other people and usually exhibit low levels of most vitamins (especially folic acid). This is because alcohol often takes the place of 50% of their daily intake of calories, with little nutritional value contained in it.

Did you know?

Essential fatty acids have been shown to be effective against ulcers, asthma, dental cavities, and skin disorders such as acne.

Did you know?

Each year in the United States, there are approximately six million pregnancies. This means that at any one time, about 4% of women in the United States are pregnant.

Time Line of Human History From Upper Paleolithic Period to the Present Time Line of Human History From Upper Paleolithic Period to the Present
Eighteen-year-olds were the largest age cohort in the first year of the war in both armies. Soldiers Eighteen-year-olds were the largest age cohort in the first year of the war in both armies. Soldiers
Carrie Mae Weems, You Became a Scientific Profile, from the series From Here I Saw What Happened ... Carrie Mae Weems, You Became a Scientific Profile, from the series From Here I Saw What Happened ...
Sequence Series Arithmatic Progression Problem Sequence Series Arithmatic Progression Problem
Sequence Series Arithmatic Progression Problem Sequence Series Arithmatic Progression Problem
Video: Calvin cycle (The light-independent reactions )

For a complete list of videos, visit our video library