Please answer questions only no need to show work 12. What is the present value of a perpetuity of 100 per year? Assume interest rate is 10% andthe first payment is made at end of the year.A. 1000B. 1100C. 1200D. 1300E. None of above13. How long does it take money to triple at EAR of 10%?A. 11.53 yearsB. 12.53 yearsC. 13.53 yearsD. 14.53 yearsE. None of above.14. Baruch, Inc. paid a dividend of $1 last year. The analyst expects the dividend to grow by10% in each of the next three years, after which it will grow at a constant rate of 4% per year.The required return is estimated to be 9%. The dividend at year 4 (round it to two decimals)is expected to be:A. 1.33B. 1.36C. 1.38D. 1.40E. None of above15. One year ago, an investor purchased a 10-year, $1000 par value, 6% semiannual couponbond with a 6% yield to maturity. What is the purchasing price?A. $800B. $900C. $1200D. $1300E. None of above6

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12. What is the present value of a perpetuity of 100 per year? Assume interest rate is 10% and the first payment is made at end of the year. A. 1000 B. 1100 C. 1200 D. 1300 E. None of above

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Please answer questions only no need to show work

12. What is the present value of a perpetuity of 100 per year? Assume interest rate is 10% and
the first payment is made at end of the year.
A. 1000
B. 1100
C. 1200
D. 1300
E. None of above
13. How long does it take money to triple at EAR of 10%?
A. 11.53 years
B. 12.53 years
C. 13.53 years
D. 14.53 years
E. None of above.
14. Baruch, Inc. paid a dividend of $1 last year. The analyst expects the dividend to grow by
10% in each of the next three years, after which it will grow at a constant rate of 4% per year.
The required return is estimated to be 9%. The dividend at year 4 (round it to two decimals)
is expected to be:
A. 1.33
B. 1.36
C. 1.38
D. 1.40
E. None of above
15. One year ago, an investor purchased a 10-year, $1000 par value, 6% semiannual coupon
bond with a 6% yield to maturity. What is the purchasing price?
A. $800
B. $900
C. $1200
D. $1300
E. None of above
6

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