You wish to put $1,500 in a savings account at the end of each year for...
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You wish to put $1,500 in a savings account at the end of each year for 10 years and then allow the account to compound for an additional 15 years. If the account earns 12% per annum, compounded semi-annually. How much will be in the account at the end of the 25th year? (b) You are considering the purchase of ABC Company's preference shares that pay a perpetual annual dividend of $4 per share. If the appropriate discount rate for this investment is 13%, what is the price of the share? You wish to put $1,500 in a savings account at the end of each year for 10 years and then allow the account to compound for an additional 15 years. If the account earns 12% per annum, compounded semi-annually. How much will be in the account at the end of the 25th year? (b) You are considering the purchase of ABC Company's preference shares that pay a perpetual annual dividend of $4 per share. If the appropriate discount rate for this investment is 13%, what is the price of the share?
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Answer rating: 100% (QA)
a To calculate the amount in the savings account at the end of the 25th year we can break down the problem into two parts the accumulation of annual d... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
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