Microsoft Word - 10002-Assignment 1 (Sem 1, 2017).docx

1. has finally agreed to contribute towards funding your retirement. Specifically, she will start with a contribution of $6,000 today (that is, end of year 0) but this amount will then decline at a constant rate of 3% p.a. over the foreseeable future. If the interest rate appropriate for valuing your auntys contribution is 12% p.a. its present value today is

2The earnings and dividends of XYX Ltd are expected to grow at a rate of 5%, 10% and 15% p.a. during years 1 through 3 respectively. After that, the earnings and dividends are expected to stabilize to a long-run growth rate of 5% p.a. forever. The companys current dividend per share is $1.50 and the required rate of return on the stock is 12% p.a. Based on this information, the current price should be

Microsoft Word - 10002-Assignment 1 (Sem 1, 2017).docx

1. T