Problem 3(1). Suppose that the singer Taylor Swift considers a similar deal. Specifically, she plans to obtain $50ml. in exchange for a fixed monthly payment that comes from her royalties over the future 10 years. What is the lowest amount of yearly royalties needed to meet the fixed payment to investors that require a 3% annual return on their investment, and get the first payment 2 months after the issuance date?

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
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Problem 3(1).

Suppose that the singer Taylor Swift considers a similar deal. Specifically, she plans to obtain $50ml. in exchange for a fixed monthly payment that comes from her royalties over the future 10 years. What is the lowest amount of yearly royalties needed to meet the fixed payment to investors that require a 3% annual return on their investment, and get the first payment 2 months after the issuance date?

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