7.Which of the following is most TRUE?A.The value of cash flows received at different times is comparable at all times. B.For a given interest rate the longer the time period, the higher the present value.C.Discounting means finding the future value of some compound amountD.For a given time period – the higher the interest rate, the smaller the present valueE.Growing perpetuities have cash flows that grow at a continuous progressive rate and continue forever
Class 3, slide 18 8.TD Canada Trust Bank wants to sell a new preferred stock at $120 per share. The bank alreadyhas a preferred stock outstanding selling at a price of $50. The company paid a dividend of 2.50per share last year. What dividend would the Bank have to offer for the new preferred stock if itwants to offer the same rate as the existing issue?
9.If you expect to receive $300 in year four and five, $200 in the year two and three and $100 in thefirst year, then what is the value of the cash flow in year 3?
Find the present value of the cash flows. Calculator input: