FIN 325 Week 4 Problems

# FIN 325 Week 4 Problems - 14.6232 15.7481 =15.7481/1.12^3...

This preview shows page 1. Sign up to view the full content.

Chapter 6 11) a) =1*.04 1.04 1st year = 1.04*.04 1.08 2nd year =1.0816*0.04 1.1249 3rd year PV b) =14.0608*0.04 14.6232 3rd year 0.9286 =13.52*.04 14.0608 2nd year 0.8622 =13*.04 13.5200 1st year 11.2092 13.00 Total c) =13*.04 13.52 1st year =13.52*.04 14.06 2nd year =14.0608*0.04 14.62 3rd year FV PV d) 1.04 1st year 1.04 =1.04/1.12^1 0.9286 1.08 2nd year 1.08 =1.0816/1.12^2 0.8622 1.1249 3rd year
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 14.6232 15.7481 =15.7481/1.12^3 11.2092 13.00 Total =14.0608*0.04 14.6232 3rd year =13.52*.04 14.0608 2nd year = 13 * .04 13.5200 1st year 12) next dividend is 4 = 44.44 rate of return is 15% 40%*15 = 6 .15 -.06 company reinvests 40% of earnings 44.44 sells for \$40 40.00 4.44 discount rate 10%...
View Full Document

## This note was uploaded on 09/06/2011 for the course FIN n/a taught by Professor N/a during the Spring '06 term at University of Phoenix.

Ask a homework question - tutors are online