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Question #$3-$ VBA User Defined Functions

Part A: Create a UDF called growann $(CF,r,g,n),$ the function will have the following inputs, initial cash flow, $CF,$ discount rate, $r,$ a growth rate, $g,$ a number of periods, $n.$

growann $=c{f}^{**}(\frac{1-(\frac{1+g}{1+r}{)}^{{?}^{{?}^{?}}}n}{r-g})$

Use your function to an swer the following questions on this sheet.

Part B: Create a UDF called gordon $($div$,$ period, $r,g)$ the function has the following inputs dividend amount, div, the period where the dividend is paid either today, $0,$ or next year, $1,$ a discount rate, $r,$ and a growth rate, $g-$

If the dividend period is $0,$ then calculate the dividend at time $1,$

div $=$div$**(1+g)$

gordon $=di\frac{v}{r-g}$

Hint: you will need an if statement in your code to account for the dividend period.

Growing Annutiy $-$ TVM

You plan to work for $35$ years. You initial salary, paid $12$ months from today, will be $$65,000.$

Your salary is expected to grow at $3\%$ per year for the next $35$ years.

Assuming a discount rate of $8\%,$ calculate the present value of your expected future earnings.

Answer

Stock Valuation

XYZ Inc. just paid a dividend of $2\mathrm{.}14$ per share. The dividends are expected to grow at $4\%$ per year, forever. The investor requires a $10\%$ rate of return. Calcualte the price per share.

Answer