MNOP Part 2 Integrative Data Case 3 This case draws on material from Chapters 3-7. Adam has just graduated, and has a good job at a decent starting salary. He hopes to purchase his first new car. The car that Adam is considering costs $47,000. The dealer has given him three payment options: 1. Zero percent financing. Make a $2.800 down payment from his savings and finance the remainder with a 0% 7 APR loan for 60 months. Adam has more than enough cash for the down payment, thanks to generous graduation gifts. 8 2. Rebate with no money down. Receive a $5,000 rebate from the car dealer and finance the rest with a standard 60- 9 month loan, with an 4.95% APR. He likes this option, as he could think of many other uses for the $2.800 of his saving. 10 3. Pay cash. Get the $5,000 rebate and pay the rest with cash. While Adam doesn't have balance of the car cost in 11 hand, he wants to evaluate this option. His parents always paid cash when they bought a family car: Adam wonders if 12 this really was a good idea. 14 Adam's fellow graduate, Jenna, has been trying to decide how much of her new salary she could save for retirement. Jenna is 15 considering putting $3,000 of her annual savings in a stock fund. She just turned 22 and has a long way to go until retirement at Instruction Adam - Questions 1-4 Jenna - Questions 59 Type here to search 2:29 AM O He w A A 60A/5/202 fo CDELL FLIG M I NI 13 14 Adam's fellow graduate, Jenna, has been trying to decide how much of her new salary she could save for retirement. Jenna is 15 considering putting $3,000 of her annual savings in a stock fund. She just turned 22 and has a long way to go until retirement at 16 age 60, and she considers this risk level reasonable. The fund she is looking at has carned an average of 6.10% over the past 15 17 years and could be expected to continue earning this amount, on average. While she has no current retirement savings, eight years 18 ago Jenna's grandparents gave her a new 30-year U.S. Treasury bond with a $20.000 face value with 4.25% semiannual coupons Jenna wants to know her retirement income if she both (1) sells her Treasury bond at its current market value and invests the proceeds in the stock fund and (2) saves an additional $3.000 at the end of each year in the stock fund from now until she retires. Once she retires. Jenna wants those 20 savings to last until she is 94. RENN 23 Case Questions 24 1. What are the cash flows associated with each of Adam's three car financing options? 25 2. Suppose that, similar to his parents, Adam had plenty of cash in the bank so that he could easily afford to pay cash for the car without running 26 into debt now or in the foreseeable future. If his cash cams interest at a 5.4% APR (based on monthly compounding) at the bank, what would be his 27 best purchase option for the car? 28 3. In fact, Adam doesn't have sufficient cash to cover all his debts including his substantial) student loans. The loans have a 10% APR, and any 29 money spent on the car could not be used to pay down the loans. What is the best option for Adam now? (Hint: Note that having an extra $1 today Instruction Adam - Questions 1-4 Jenna - Questions 5-9 2:30 AM Type here to search O te 3 3 LUMNO 3 . In fact, Adam doesn't have sufficient cash to cover all his debts including his substantial student loans. The loans have a 10% APR, and any money spent on the car could not be used to pay down the loans. What is the best option for Adam now? (Hint: Note that having an extra $1 today saves Adam roughly $1.10 next year because he can pay down the student loans. So, 10% is Adam's time value of money in this case.) 4. Suppose instead Adam has a lot of credit card debt, with an 18% APR, and he doubts he will pay off this debt completely before he pays off 2 the car. What is Adam's best option now? 5. Suppose Jenna's Treasury bond has a coupon interest rate of 4.25%, paid semiannually, while current Treasury bonds with the same maturity 34 date have a yield to maturity of 2.90 % (expressed as an APR with semiannual compounding). If she has just received the bond's 16th coupon, what is 35 the value of Jenna's Treasury Bond today? 36 6. Suppose Jenna sells the bond, reinvests the proceeds, and then saves as she planned. If, indeed, Jenna earns a 6.10% annual return on her 37 savings, how much could she withdraw each year in retirement? (Assume she begins withdrawing the money from the account in cqual amounts at the 38 end of each year once her retirement begins.) 39 7. Jenna expects her salary to grow regularly. While there are no guarantees, she believes an increase of 2.50% a year is reasonable. She plans to 40 save $3,000 the first year, and then increase the amount she saves by the amount of her annual salary increase. Unfortunately, prices will also grow 41 due to inflation. Suppose Jenna assumes there will be 1.90% inflation every year. In retirement, she will need to increase her withdrawals each year to 42 keep up with inflation a. How much money will Jenna have at her retirement? b. How much can she withdraw at the end of the first year of her retirement in today's dollars? Hint: Value Jenna's Retirement Fund at Retirement Age = FV of Treasury Bond + FV of Jenna's Savings 8. Should Jenna sell her Treasury bond and invest the proceeds in the stock fund? Give at least one reason for and against this plan. Instruction Adam - Questions 1-4 Jenna - Questions 5-9 2:31 AM Type here to search OR MY 4/5/2020 e Ze wat Paste LO IU - Merge & Center - $ - % $8-18 ho Conditional Formatas Cell Formatting - Table Styles Insert Delete Format Clea Sort & Find & f . Seled Editing Clipboard Stvir X NE LCD E F G H OPERA a. How much money will Jenna have at her retirement? b. How much can she withdraw at the end of the first year of her retirement in today's dollars? Hint: Value Jenna's Retirement Fund at Retirement Age = FV of Treasury Bond + FV of Jenna's Savings 8. Should Jenna sell her Treasury bond and invest the proceeds in the stock fund? Give at least one reason for and against this plan. 9. At the last minute, Jenna considers investing in Coca-Cola stock at a price of $53.48 per share instead. The stock just paid an annual 48 dividend of $1.60 and she expects the dividend to grow at 4.00% annually. If the next dividend is due in one year, what expected return is Coca-Cola 49 stock offering? Instruction Adam - Questions 1-4 Jenna - Questions 5.9 - -- A s 2:31 AM Type here to search O He wa L M N S42,000 NOTE Use this information to solve the data case contained in text Carcent an Term in months Option 1 Down Payment Option 2 and 3 Rebate Option 2 Loan rate Deposit Interest Rates as Given in Textipe 222. 725) $2,500 $5,000 14.95 c ont (12 pts): Loan Term Interest Rate (APR) Option 3-Zero percent financing Option 2. Rebate w/ So down Option 3 - Pay cash MONTHLY CASH FLOWS: Option 1. Zaro percent financi Option 2 Rebate w/5 down 22 Question 2 (12 pts Option Option Option Instruction Adam Questions 1-4 Jenna. Questions 5-9 Type here to search A . 444/5/2012 - FILL Given in Text (Pg 222 223) Question 1(12 pts): Down Payment Amount Financed Interest Rate (APR) Loan Term (months) Monthly Payment -REDEWEX Option 1- Zero percent financing Option 2. Rebate w/ So down Option 3 - Pay cash MONTHLY CASH FLOWS: Cash flow for Month tash flow for Month 1 to 48 Option 1- Zero percent financing Option 2 - Rebate w/ So down Option 3 - Pay cash APO Down Payment 22 Question 2 (12 pts): gs PV of Car Financine at Deposit APR Which option should he select? Option 1 Option 2 Option 3 26 Down Payment PV of Car Financing at Student Loan APR Which option should he select! 20 Question 3 (12 pts): Option 1 Option 2 Option Instruction Adam . Questions 1-4 Jenna - Questions 5.9 Type here to search Adam's car purchase S Car oost Loan Term in months Option 1 Down Payment Option 2 and 3 Rebate Option 2 loan rate Deposit Interest Rates as Given in Text (pg 222- 223) $47,000 NOTE: Use this information to solve the data case in addition 60 $2,800 $5,000 : 4.95% 9 Question 1 (12 pts): Down Payment Amount Financed Interest Rate (APR) Loan Term months) Monthly Payment Option 1-Zero percent financing Option 2 - Rebate w/ So down Option 3 - Pay cash MONTHLY CASH FLOWS: Cash flow for Month O Cash flow for Month 1 to 48 Option 1-Zero percent financing Option 2 - Rebate w/ So down Option 3 - Pay cash Down Payment PV of Car Financing at Deposit APR Which option should he select? 22 Question 2 (12 pts): Option 1 Option 2 Option 3 Instruction Adam Questions 1-4 Jenna - Questions 5-9 Tume here to cearch F36 B Down Payment PV of Car Financing at Deposit APR 22 Question 2 (12 pts): Which option should he select? Option 1 Option 2 Option 3 Down Payment PV of Car Financing at Student Loan APR 20 Question 3 (12 pts): 20 Which option should he select? Option 1 Option 2 Option 3 Down Payment PV of Car Financing at Credit Card APR 34 Question 4 (12 pts): Which qotion should he select Option 1 Option 2 Option 3 Instruction Adam Questions 1-4 Jenna - Questions 5-9 Type here to search O te w 019 Step 2: Once you know how much Jenna saves by retirement, this will become Jenna's Pv at the age. Fipe F G H I J K L M N O P 2 e s retirement income these her boods with face value identified below and invests the proceeds in the stock market at a return identified below and saves an additional amount identified below at the end of each year 3 in a stod und unti retirement Jenna wants those retirement savings to last to the are specified in the data table below $20,000 NOTE: Use this information to solve the data case in addition to other information in the text book 2.00% $3,000.00 6.10W T-Bond Face Value Coupon late Current YTM Remaining Term on T-Bond in years Annual Investment in stock fund Annual Return on Stock Fund Jenna's current age Desired retirement age Planned life expectancy Case in years) lenna's expected annual salary increases for 07 Inflation Rate for a Current Coca-Cola Stock Price for 99 Coca Cola Annual Dividend (just paid) Coca-Cola Expected Dividend Growth $1.60 4% 25 Question 5 12 pts: What is the value today of the Treasury Bond? T-Bond Face Value Instruction Adam - Questions 1-4 Jenna Questions 5.9 Type here to search 2 Jenna's retirement income if she sells her T-bonds with face value identified below and invests the proceeds in the stock market at a return identifi 3 in a stock fund until retirement. Jenna wants those retirement savings to last to the age specified in the data table below NOTE: Use this information to solve the data case in addition T-Bond Face Value Coupon Rate Current YTM Remaining Term on T-Bond in years Annual Investment in stock fund Annual Return on Stock Fund Jenna's current age Desired retirement age Planned life expectancy (age in years) Jenna's expected annual salary increases for $20,000 .25% 2.90% 22 $3,000.00 6.10% 22 60 94 2.50% 1.90% Inflation Rate for Q7 Current Coca-Cola Stock Price for 09 Coca-Cola Annual Dividend (just paid) Cocal-Cola Expected Dividend Growth 53.48 $1.60 Question 5 (12 pts): What is the value today of the Treasury Bond? T-Bond Face Value Instruction Adam - Questions 1-4 Jenna - Questions 5-9 Type here to search o X f x D39 Step 2: Once you know how much Jenna saves by retirement, this will become Jenna's PV at th= D G 4% Cocal-Cola Expected Dividend Growth 25 Question 5 (12 pts): What is the value today of the Treasury Bond? E T-Bond Face Value Coupon Rate Semiannual Pmt Remaining Term (years) Current YTM PVS 36 Question 6 (12 pts): Treasury Bond PV Annual investment in stock fund Number of years Jenna saves money lyears) Number of years of withdrawal lyears) Return on stock fund r, 96) Step 1: FV of saving from aFe 22-63 Step 2: Annual withdrawal amount beginning age 60 Hint: Step 1: Find how much money will Jenna save by the time she retires. Step 2: Once you know how much Jenna Saves by retirement, this will become Jenna's PV at that age. Find payment (withdrawal)Jenna gets each year in retirement 46 Question 7 (12 ptshi Step 1: Find Cash flow for Jenna from now until retirement Time Period o Cash Flow Instruction Adam - Questions 1-4 Jenna - Questions 5.9 234 059 TE I retirement 45 46 Question 7(12 pts) Step 1: Find Cash flow for Jenna from now until retirement Time Period Cash Flow 5 6 7 Return on stock fund r,%) Inflation rate (g) Step 2: Find FV at Retirement Step 3: Jenna's first retirement withdrawal Step 4 Value of first retirment withdrawal in today's S Should Jenna sell her Treasury bond and invest the proceeds in the stock fund? Give at least one reason for and against this plan? 57 Question 8 (4 pts): 64 Question 9 (12 pts): Coca-Cola stock Current Price Annual Dividend Dividend Growth Expected Dividend in one year Instruction Adam - Questions 1-4 Jenna - Questions 5.9 Step 2: Once you know how much Jend SdVus Dyrelilellent, LIIIJ WII ULUITIL JLINIU JITU T E Cash Flow Return on stock fund (%) Inflation rate (g) Step 2: Find FV at Retirement Step 3: Jenna's first retirement withdrawal Step 4 Value of first retirment withdrawal in today's $ Should Jenna sell her Treasury bond and Invest the proceeds in the stock fund? Give at least one reason for 57 Question 8 (4 pts): and against this plan? 64 Question 9 (12 pts): Coca-Cola stock Current Price Annual Dividend Dividend Growth Expected Dividend in one year Instruction Adam - Questions 1- 4 Jenna - Questions 5-9 Type here to search O E W MNOP Part 2 Integrative Data Case 3 This case draws on material from Chapters 3-7. Adam has just graduated, and has a good job at a decent starting salary. He hopes to purchase his first new car. The car that Adam is considering costs $47,000. The dealer has given him three payment options: 1. Zero percent financing. Make a $2.800 down payment from his savings and finance the remainder with a 0% 7 APR loan for 60 months. Adam has more than enough cash for the down payment, thanks to generous graduation gifts. 8 2. Rebate with no money down. Receive a $5,000 rebate from the car dealer and finance the rest with a standard 60- 9 month loan, with an 4.95% APR. He likes this option, as he could think of many other uses for the $2.800 of his saving. 10 3. Pay cash. Get the $5,000 rebate and pay the rest with cash. While Adam doesn't have balance of the car cost in 11 hand, he wants to evaluate this option. His parents always paid cash when they bought a family car: Adam wonders if 12 this really was a good idea. 14 Adam's fellow graduate, Jenna, has been trying to decide how much of her new salary she could save for retirement. Jenna is 15 considering putting $3,000 of her annual savings in a stock fund. She just turned 22 and has a long way to go until retirement at Instruction Adam - Questions 1-4 Jenna - Questions 59 Type here to search 2:29 AM O He w A A 60A/5/202 fo CDELL FLIG M I NI 13 14 Adam's fellow graduate, Jenna, has been trying to decide how much of her new salary she could save for retirement. Jenna is 15 considering putting $3,000 of her annual savings in a stock fund. She just turned 22 and has a long way to go until retirement at 16 age 60, and she considers this risk level reasonable. The fund she is looking at has carned an average of 6.10% over the past 15 17 years and could be expected to continue earning this amount, on average. While she has no current retirement savings, eight years 18 ago Jenna's grandparents gave her a new 30-year U.S. Treasury bond with a $20.000 face value with 4.25% semiannual coupons Jenna wants to know her retirement income if she both (1) sells her Treasury bond at its current market value and invests the proceeds in the stock fund and (2) saves an additional $3.000 at the end of each year in the stock fund from now until she retires. Once she retires. Jenna wants those 20 savings to last until she is 94. RENN 23 Case Questions 24 1. What are the cash flows associated with each of Adam's three car financing options? 25 2. Suppose that, similar to his parents, Adam had plenty of cash in the bank so that he could easily afford to pay cash for the car without running 26 into debt now or in the foreseeable future. If his cash cams interest at a 5.4% APR (based on monthly compounding) at the bank, what would be his 27 best purchase option for the car? 28 3. In fact, Adam doesn't have sufficient cash to cover all his debts including his substantial) student loans. The loans have a 10% APR, and any 29 money spent on the car could not be used to pay down the loans. What is the best option for Adam now? (Hint: Note that having an extra $1 today Instruction Adam - Questions 1-4 Jenna - Questions 5-9 2:30 AM Type here to search O te 3 3 LUMNO 3 . In fact, Adam doesn't have sufficient cash to cover all his debts including his substantial student loans. The loans have a 10% APR, and any money spent on the car could not be used to pay down the loans. What is the best option for Adam now? (Hint: Note that having an extra $1 today saves Adam roughly $1.10 next year because he can pay down the student loans. So, 10% is Adam's time value of money in this case.) 4. Suppose instead Adam has a lot of credit card debt, with an 18% APR, and he doubts he will pay off this debt completely before he pays off 2 the car. What is Adam's best option now? 5. Suppose Jenna's Treasury bond has a coupon interest rate of 4.25%, paid semiannually, while current Treasury bonds with the same maturity 34 date have a yield to maturity of 2.90 % (expressed as an APR with semiannual compounding). If she has just received the bond's 16th coupon, what is 35 the value of Jenna's Treasury Bond today? 36 6. Suppose Jenna sells the bond, reinvests the proceeds, and then saves as she planned. If, indeed, Jenna earns a 6.10% annual return on her 37 savings, how much could she withdraw each year in retirement? (Assume she begins withdrawing the money from the account in cqual amounts at the 38 end of each year once her retirement begins.) 39 7. Jenna expects her salary to grow regularly. While there are no guarantees, she believes an increase of 2.50% a year is reasonable. She plans to 40 save $3,000 the first year, and then increase the amount she saves by the amount of her annual salary increase. Unfortunately, prices will also grow 41 due to inflation. Suppose Jenna assumes there will be 1.90% inflation every year. In retirement, she will need to increase her withdrawals each year to 42 keep up with inflation a. How much money will Jenna have at her retirement? b. How much can she withdraw at the end of the first year of her retirement in today's dollars? Hint: Value Jenna's Retirement Fund at Retirement Age = FV of Treasury Bond + FV of Jenna's Savings 8. Should Jenna sell her Treasury bond and invest the proceeds in the stock fund? Give at least one reason for and against this plan. Instruction Adam - Questions 1-4 Jenna - Questions 5-9 2:31 AM Type here to search OR MY 4/5/2020 e Ze wat Paste LO IU - Merge & Center - $ - % $8-18 ho Conditional Formatas Cell Formatting - Table Styles Insert Delete Format Clea Sort & Find & f . Seled Editing Clipboard Stvir X NE LCD E F G H OPERA a. How much money will Jenna have at her retirement? b. How much can she withdraw at the end of the first year of her retirement in today's dollars? Hint: Value Jenna's Retirement Fund at Retirement Age = FV of Treasury Bond + FV of Jenna's Savings 8. Should Jenna sell her Treasury bond and invest the proceeds in the stock fund? Give at least one reason for and against this plan. 9. At the last minute, Jenna considers investing in Coca-Cola stock at a price of $53.48 per share instead. The stock just paid an annual 48 dividend of $1.60 and she expects the dividend to grow at 4.00% annually. If the next dividend is due in one year, what expected return is Coca-Cola 49 stock offering? Instruction Adam - Questions 1-4 Jenna - Questions 5.9 - -- A s 2:31 AM Type here to search O He wa L M N S42,000 NOTE Use this information to solve the data case contained in text Carcent an Term in months Option 1 Down Payment Option 2 and 3 Rebate Option 2 Loan rate Deposit Interest Rates as Given in Textipe 222. 725) $2,500 $5,000 14.95 c ont (12 pts): Loan Term Interest Rate (APR) Option 3-Zero percent financing Option 2. Rebate w/ So down Option 3 - Pay cash MONTHLY CASH FLOWS: Option 1. Zaro percent financi Option 2 Rebate w/5 down 22 Question 2 (12 pts Option Option Option Instruction Adam Questions 1-4 Jenna. Questions 5-9 Type here to search A . 444/5/2012 - FILL Given in Text (Pg 222 223) Question 1(12 pts): Down Payment Amount Financed Interest Rate (APR) Loan Term (months) Monthly Payment -REDEWEX Option 1- Zero percent financing Option 2. Rebate w/ So down Option 3 - Pay cash MONTHLY CASH FLOWS: Cash flow for Month tash flow for Month 1 to 48 Option 1- Zero percent financing Option 2 - Rebate w/ So down Option 3 - Pay cash APO Down Payment 22 Question 2 (12 pts): gs PV of Car Financine at Deposit APR Which option should he select? Option 1 Option 2 Option 3 26 Down Payment PV of Car Financing at Student Loan APR Which option should he select! 20 Question 3 (12 pts): Option 1 Option 2 Option Instruction Adam . Questions 1-4 Jenna - Questions 5.9 Type here to search Adam's car purchase S Car oost Loan Term in months Option 1 Down Payment Option 2 and 3 Rebate Option 2 loan rate Deposit Interest Rates as Given in Text (pg 222- 223) $47,000 NOTE: Use this information to solve the data case in addition 60 $2,800 $5,000 : 4.95% 9 Question 1 (12 pts): Down Payment Amount Financed Interest Rate (APR) Loan Term months) Monthly Payment Option 1-Zero percent financing Option 2 - Rebate w/ So down Option 3 - Pay cash MONTHLY CASH FLOWS: Cash flow for Month O Cash flow for Month 1 to 48 Option 1-Zero percent financing Option 2 - Rebate w/ So down Option 3 - Pay cash Down Payment PV of Car Financing at Deposit APR Which option should he select? 22 Question 2 (12 pts): Option 1 Option 2 Option 3 Instruction Adam Questions 1-4 Jenna - Questions 5-9 Tume here to cearch F36 B Down Payment PV of Car Financing at Deposit APR 22 Question 2 (12 pts): Which option should he select? Option 1 Option 2 Option 3 Down Payment PV of Car Financing at Student Loan APR 20 Question 3 (12 pts): 20 Which option should he select? Option 1 Option 2 Option 3 Down Payment PV of Car Financing at Credit Card APR 34 Question 4 (12 pts): Which qotion should he select Option 1 Option 2 Option 3 Instruction Adam Questions 1-4 Jenna - Questions 5-9 Type here to search O te w 019 Step 2: Once you know how much Jenna saves by retirement, this will become Jenna's Pv at the age. Fipe F G H I J K L M N O P 2 e s retirement income these her boods with face value identified below and invests the proceeds in the stock market at a return identified below and saves an additional amount identified below at the end of each year 3 in a stod und unti retirement Jenna wants those retirement savings to last to the are specified in the data table below $20,000 NOTE: Use this information to solve the data case in addition to other information in the text book 2.00% $3,000.00 6.10W T-Bond Face Value Coupon late Current YTM Remaining Term on T-Bond in years Annual Investment in stock fund Annual Return on Stock Fund Jenna's current age Desired retirement age Planned life expectancy Case in years) lenna's expected annual salary increases for 07 Inflation Rate for a Current Coca-Cola Stock Price for 99 Coca Cola Annual Dividend (just paid) Coca-Cola Expected Dividend Growth $1.60 4% 25 Question 5 12 pts: What is the value today of the Treasury Bond? T-Bond Face Value Instruction Adam - Questions 1-4 Jenna Questions 5.9 Type here to search 2 Jenna's retirement income if she sells her T-bonds with face value identified below and invests the proceeds in the stock market at a return identifi 3 in a stock fund until retirement. Jenna wants those retirement savings to last to the age specified in the data table below NOTE: Use this information to solve the data case in addition T-Bond Face Value Coupon Rate Current YTM Remaining Term on T-Bond in years Annual Investment in stock fund Annual Return on Stock Fund Jenna's current age Desired retirement age Planned life expectancy (age in years) Jenna's expected annual salary increases for $20,000 .25% 2.90% 22 $3,000.00 6.10% 22 60 94 2.50% 1.90% Inflation Rate for Q7 Current Coca-Cola Stock Price for 09 Coca-Cola Annual Dividend (just paid) Cocal-Cola Expected Dividend Growth 53.48 $1.60 Question 5 (12 pts): What is the value today of the Treasury Bond? T-Bond Face Value Instruction Adam - Questions 1-4 Jenna - Questions 5-9 Type here to search o X f x D39 Step 2: Once you know how much Jenna saves by retirement, this will become Jenna's PV at th= D G 4% Cocal-Cola Expected Dividend Growth 25 Question 5 (12 pts): What is the value today of the Treasury Bond? E T-Bond Face Value Coupon Rate Semiannual Pmt Remaining Term (years) Current YTM PVS 36 Question 6 (12 pts): Treasury Bond PV Annual investment in stock fund Number of years Jenna saves money lyears) Number of years of withdrawal lyears) Return on stock fund r, 96) Step 1: FV of saving from aFe 22-63 Step 2: Annual withdrawal amount beginning age 60 Hint: Step 1: Find how much money will Jenna save by the time she retires. Step 2: Once you know how much Jenna Saves by retirement, this will become Jenna's PV at that age. Find payment (withdrawal)Jenna gets each year in retirement 46 Question 7 (12 ptshi Step 1: Find Cash flow for Jenna from now until retirement Time Period o Cash Flow Instruction Adam - Questions 1-4 Jenna - Questions 5.9 234 059 TE I retirement 45 46 Question 7(12 pts) Step 1: Find Cash flow for Jenna from now until retirement Time Period Cash Flow 5 6 7 Return on stock fund r,%) Inflation rate (g) Step 2: Find FV at Retirement Step 3: Jenna's first retirement withdrawal Step 4 Value of first retirment withdrawal in today's S Should Jenna sell her Treasury bond and invest the proceeds in the stock fund? Give at least one reason for and against this plan? 57 Question 8 (4 pts): 64 Question 9 (12 pts): Coca-Cola stock Current Price Annual Dividend Dividend Growth Expected Dividend in one year Instruction Adam - Questions 1-4 Jenna - Questions 5.9 Step 2: Once you know how much Jend SdVus Dyrelilellent, LIIIJ WII ULUITIL JLINIU JITU T E Cash Flow Return on stock fund (%) Inflation rate (g) Step 2: Find FV at Retirement Step 3: Jenna's first retirement withdrawal Step 4 Value of first retirment withdrawal in today's $ Should Jenna sell her Treasury bond and Invest the proceeds in the stock fund? Give at least one reason for 57 Question 8 (4 pts): and against this plan? 64 Question 9 (12 pts): Coca-Cola stock Current Price Annual Dividend Dividend Growth Expected Dividend in one year Instruction Adam - Questions 1- 4 Jenna - Questions 5-9 Type here to search O E W