If an investment is expected to make year-end payments of $1.50 for the next three years followed by $1.80 per year in perpetuity (indefinitely), how much should an investor be willing to pay for this investment (that is, what is the present value of the investment if the investor requires a 12% compounded quarterly rate of return?

Answer rating: 100% (QA)

Lets take this step by step Firstly we can calculate the present value of the initial three payments ... View the full answer