In the previous problem, suppose a sales associate told you the policy costs $800,000. At what interest
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In the previous problem, suppose a sales associate told you the policy costs $800,000. At what interest rate would this be a fair deal?
Data from previous problem
The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $35,000 per year forever. If the required return on this investment is 4.7 percent, how much will you pay for the policy?
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1260153590
12th edition
Authors: Stephen M. Ross, Randolph W Westerfield, Robert R. Dockson, Bradford D Jordan
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