« 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 37 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?

According to the American College of Allergy, Asthma & Immunology, more than 50 million Americans have some kind of food allergy. Food allergies affect between 4 and 6% of children, and 4% of adults, according to the CDC. The most common food allergies include shellfish, peanuts, walnuts, fish, eggs, milk, and soy.

Did you know?

Fewer than 10% of babies are born on their exact due dates, 50% are born within 1 week of the due date, and 90% are born within 2 weeks of the date.

Did you know?

As many as 28% of hospitalized patients requiring mechanical ventilators to help them breathe (for more than 48 hours) will develop ventilator-associated pneumonia. Current therapy involves intravenous antibiotics, but new antibiotics that can be inhaled (and more directly treat the infection) are being developed.

Did you know?

You should not take more than 1,000 mg of vitamin E per day. Doses above this amount increase the risk of bleeding problems that can lead to a stroke.

Did you know?

Of the estimated 2 million heroin users in the United States, 600,000–800,000 are considered hardcore addicts. Heroin addiction is considered to be one of the hardest addictions to recover from.

GI series. (a) Upper GI series begins with a barium swallow, barium shake, or barium meal. (b) Lower GI series. (a) Upper GI series begins with a barium swallow, barium shake, or barium meal. (b) Lower
This 80-year old man in a village in Hubei, China, has slowed down, but he has not retired. He is ... This 80-year old man in a village in Hubei, China, has slowed down, but he has not retired. He is ...
Charlie Stone wants to retire in 30 years, and he wants to have an annuity of $1000 a year for ... Charlie Stone wants to retire in 30 years, and he wants to have an annuity of $1000 a year for ...
Chinese new year 2023 Chinese new year 2023
Analysts expect Virtucon to make payouts of $8.7643B at the end of this year. Assume that all ... Analysts expect Virtucon to make payouts of $8.7643B at the end of this year. Assume that all ...
Video: Digestive chemicals - types & enzymes

For a complete list of videos, visit our video library