The first dividend in year 9 ((D9 )) is calculated using (D8 ):D9 = D8 × (1+ g) = 6.70 × 1.05 = 7.035Calculate the present value of the perpetuity starting in year 9:

Step 1:The perpetuity formula is a series of cash flows that continues indefinitely.So the present…

Answered: The first dividend in year 9 ((D9 )) is…

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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The first dividend in year 9 ((D9 )) is calculated using (D8 ): D9 = D8 × (1+ g) = 6.70 × 1.05 = 7.035 Calculate the present value of the perpetuity starting in year 9: