Stake = 50%

Term (years) = 30

initial investment, year 0 = $100,000

Growth rate - First 5 years = 4%

Growth rate - Last 25 years = 10%

Discount Rate "r" = 12%

DCF ???

1. Complete the cash flow table (for 30 years) and calculate the DCF for this 30 year bond

2. What is maximum you should pay today for a 30 year bond requiring $100,000 initial investment and a 4% return for the first 5 years and 10% the remaining 25 years?

C36 X V A B C Parameters Stake 50% CF1 CF2 CFn Term (years) 30 DCF = + + . .. + initial investment, year=0 |$100,000 (1+r) (1+r)2 (1+r)" Growth rate - First 5 years 4% Growth rate - Last 25 year 10% Discount Rate "r" 12% DCF 272 8 9 10 Year Cash Flow (CF) Discount Rate (r) Discounted Cash Flow (DCF) 11 1 12 13 14 15 16 17 19 20 10 24 25 in 26 16 27 17 28 18 29 19 30 20 Question 1 Question 2 Select destination and press ENTER or choose Paste Type here to search O g W P