Fin 571 hw - = \$1.00 / (0.13 - 0.04) = \$11.11 P = \$11.11 /...

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Ch. 5 Problem 1A Present Value (\$895.94) Ch. 5 Problem A10 Present Value (\$140.00) Dividen \$5.60 Growth Rate 6.00% RR 10.00% Ch. 5 Problem A12 Present Value 7.47% Return \$3.38 Selling \$45.25 Growth 0.00% Ch. 5 Problem A14 Present Value \$33.33 1/4 dividen \$1.00 RR 12% 1/4 rr 3.00% Ch. 5 Problem B16 Stock A Stock B C rate = \$45.625 C rate = \$45.625 matures = 1 matures = 7 a. \$1,010.61 \$1,020.18 b. \$1,059.42 \$1,116.03 c. \$1,097.27 \$1,195.42 d. Lower 7% equals power r/2= 1 year 1+r/2)2N= 1.0350 1.0712 1+r/2)2N-1 = 7 years 1+r/2)2N= 1.0350 1.6187 1+r/2)2N-1 = 15 years 1+r/2)2N= 1.0350 2.8068 1+r/2)2N-1 = 8% equals power r/2= 1 year 1+r/2)2N= 1.0400 1.0816 1+r/2)2N-1 = 7 years 1+r/2)2N= 1.0400 1.7317 1+r/2)2N-1 = 15 years 1+r/2)2N= 1.0400 3.2434 1+r/2)2N-1 = 9% equals power r/2= 1 year 1+r/2)2N= 1.0450 1.0920 1+r/2)2N-1 =

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7 years 1+r/2)2N= 1.0450 1.8519 1+r/2)2N-1 = 15 years 1+r/2)2N= 1.0450 3.7453 1+r/2)2N-1 = Ch. 5 Problem B18 a. Year Payment b. Year 0 -500 0 0.5 0 1 1 95 2 1.5 0 3 2 95 4 2.5 0 5 3 95 6 3.5 150 7 IRR= -3% 8 9 10 IRR= Ch.5 Problem B20 a. b. Ch. 7 Problem C1 a. P 1 = D 2 / (r - g) = \$1.00 / (0.13 - 0.06) = \$14.29 P 0 = \$14.29 / (1 + 0.13) 1 = \$12.64 P 3 = D 4 / (r - g)

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Unformatted text preview: = \$1.00 / (0.13 - 0.04) = \$11.11 P = \$11.11 / (1 + 0.13) 3 = \$7.70 Expected return on the Stock market [E(R Stock Market ) = [(0.20 * (-0.10) + (0. (0.30 = (-0.02 + 0.035 + 0. = 0.0975 or 9.75% Expected return on the Stock market [E(R Chicago Market ) = [(0.20 * (-0.15) + (0 (0.30 = (-0.03 + 0.0525 + = 0.15 or 15% Stock C C rate = \$45.625 matures = 15 \$1,001.17 \$1,006.39 \$1,010.18 \$0.0350 \$0.0712 1+r/2)2N * r/2 = \$0.0375 \$0.6187 1+r/2)2N * r/2 = \$0.0567 \$1.8068 1+r/2)2N * r/2 = \$0.0982 \$0.0400 \$0.0816 1+r/2)2N * r/2 = \$0.0433 \$0.7317 1+r/2)2N * r/2 = \$0.0693 \$2.2434 1+r/2)2N * r/2 = \$0.1297 \$0.0450 \$0.0920 1+r/2)2N * r/2 = \$0.0491 \$0.8519 1+r/2)2N * r/2 = \$0.0833 \$2.7453 1+r/2)2N * r/2 = \$0.1685 Payment-500 95 95 95 95 95 95 95 95 95 1095 22% .35 * 0.10) + 0 * 0.15) + (0.15 * 0.25)] .045 + 0.0375) (0.35 * 0.15) + 0 * 0.25) + (0.15 * 0.35)] + 0.075 + 0.0525)...
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This note was uploaded on 06/05/2010 for the course FINANCE 571 taught by Professor Mc during the Spring '10 term at University of Phoenix.

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Fin 571 hw - = \$1.00 / (0.13 - 0.04) = \$11.11 P = \$11.11 /...

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