Benjamin just won an $45,000,000 lottery in Michigan. Instead of receiving a lump sum, Benjamin found...

 

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Benjamin just won an $45,000,000 lottery in Michigan. Instead of receiving a lump sum, Benjamin found that he would receive $3,000,000 annually (end of year) for 15 years. Benjamin is 75 years old and wants his money now. Benjamin has been offered $17,852,207 to sell his ticket. What rate of return is the buyer expecting to make if Benjamin accepts the offer? Question 13 (3.33 points) Thermo Fisher Scientific Inc. is planning to offer a $1,000 par value 12-year maturity bond with a coupon interest rate that changes every 4 years. The coupon rate for the first 4 years is 11.00 percent, 12.80 percent for the next 4 years, and 14.20 percent for the final 4 years. If Harper requires a 22 percent rate of return on a bond of this quality and maturity, what is the maximum price Harper would pay for the bond? (Assume interest is paid annually at the end of each year.) Benjamin just won an $45,000,000 lottery in Michigan. Instead of receiving a lump sum, Benjamin found that he would receive $3,000,000 annually (end of year) for 15 years. Benjamin is 75 years old and wants his money now. Benjamin has been offered $17,852,207 to sell his ticket. What rate of return is the buyer expecting to make if Benjamin accepts the offer? Question 13 (3.33 points) Thermo Fisher Scientific Inc. is planning to offer a $1,000 par value 12-year maturity bond with a coupon interest rate that changes every 4 years. The coupon rate for the first 4 years is 11.00 percent, 12.80 percent for the next 4 years, and 14.20 percent for the final 4 years. If Harper requires a 22 percent rate of return on a bond of this quality and maturity, what is the maximum price Harper would pay for the bond? (Assume interest is paid annually at the end of each year.)

Answer rating: 100% (QA)

To determine the rate of return the buyer is expecting if Benjamin accepts the offer we need to calculate the present value of the annuity payments Be... View the full answer