You have just been fired as CEO. As consolation the board of directors gives you a five
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You have just been fired as CEO. As consolation the board of directors gives you a five year consulting contract at $150,000 per year. What is the duration of this contract if your personal borrowing rate is 9 percent? Use duration to calculate the change in the contract’s present value for a .5 percent increase in your borrowing rate.
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The formula for the duration of a level annuity is Also we know that This tells u...View the full answer
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Related Book For
Principles of Corporate Finance
ISBN: 978-0072869460
7th edition
Authors: Richard A. Brealey, Stewart C. Myers
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