Corporate Finance
3rd Edition
ISBN: 9780132992473
Author: Jonathan Berk, Peter DeMarzo
Publisher: Prentice Hall
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 4.6, Problem 1CC
Summary Introduction
To find: The tools that are used to simplify the computation of present values.
Introduction:
The
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
For EnPro, Please find the following values using the pdf (value line) provided . Please no excle.
When finding R, use the formula: Risk Free Rate + Beta * (Market Rate – Risk Free Rate)
The Risk Free Rate will always be 0.016 and the Market Rate will always be 0.136 for this problem. (For R, I got 17.2%, If I'm wrong can you please explain how)
On Value Line: DPO = All Div'ds to Net Profit
On Value Line: ROE = Return on Shr. Equity
On Value Line: P/E = Avg Ann'l P/E ratio*
The first 4 results should be rated to the year 2025 (r, Average DPO, Growth rate, Average P/E)
r= _
Average DPO= _
Growth rate= _
Average P/E= _
2026 EPS= _
2027 EPS= _
2028 EPS= _
2026 dividend= _
2027 dividend= _
2028 dividend= _
2028 price= _
2028 total cash flow Intrinsic value= _
You want to buy equipment that is available from 2 companies. The price of the equipment is the same for both companies. Gray
Media would let you make quarterly payments of $1,430 for 7 years at an interest rate of 1.59 percent per quarter. Your first payment to
Gray Media would be today. River Media would let you make monthly payments of $X for 8 years at an interest rate of 1.46 percent per
month. Your first payment to River Media would be in 1 month. What is X?
Input instructions: Round your answer to the nearest dollar.
59
You want to buy equipment that is available from 2 companies. The price of the equipment is the same for both companies. Gray
Media would let you make quarterly payments of $14,000 for 6 years at an interest rate of 1.50 percent per quarter. Your first payment
to Gray Media would be in 3 months. Island Media would let you make monthly payments of $X for 4 years at an interest rate of
1.35 percent per month. Your first payment to Island Media would be today. What is X?
Input instructions: Round your answer to the nearest dollar.
99
Chapter 4 Solutions
Corporate Finance
Ch. 4.1 - Prob. 1CCCh. 4.1 - Prob. 2CCCh. 4.2 - Prob. 1CCCh. 4.2 - Prob. 2CCCh. 4.2 - Prob. 3CCCh. 4.3 - Prob. 1CCCh. 4.3 - Prob. 2CCCh. 4.4 - Prob. 1CCCh. 4.4 - What benefit does a firm receive when it accepts a...Ch. 4.5 - How do you calculate the present value of a a....
Ch. 4.5 - How are the formulas for the present value of a...Ch. 4.6 - Prob. 1CCCh. 4.6 - Prob. 2CCCh. 4.7 - Prob. 1CCCh. 4.7 - Prob. 2CCCh. 4.8 - Prob. 1CCCh. 4.8 - Prob. 2CCCh. 4.9 - Prob. 1CCCh. 4.9 - Prob. 2CCCh. 4.A - Your grandmother bought an annuity from Rock Solid...Ch. 4.A - Prob. A.2PCh. 4 - You have just taken out a five-year loan from a...Ch. 4 - Prob. 2PCh. 4 - Calculate the future value of 2000 in a. Five...Ch. 4 - Prob. 4PCh. 4 - Your brother has offered to give you either 5000...Ch. 4 - Prob. 6PCh. 4 - Prob. 7PCh. 4 - Your daughters currently eight years old. You...Ch. 4 - Prob. 9PCh. 4 - Prob. 10PCh. 4 - Suppose you receive 100 at the end of each year...Ch. 4 - You have just received a windfall from an...Ch. 4 - Prob. 13PCh. 4 - You have been offered a unique investment...Ch. 4 - Prob. 15PCh. 4 - Prob. 16PCh. 4 - How would your answer to Problem 16 change if the...Ch. 4 - The British government has a consol bond...Ch. 4 - What is the present value of 1000 paid at the end...Ch. 4 - You are head of the Schwartz Family Endowment for...Ch. 4 - When you purchased your house, you took out a...Ch. 4 - Prob. 22PCh. 4 - Your grandmother has been putting 1000 into a...Ch. 4 - A rich relative has bequeathed you a growing...Ch. 4 - Prob. 25PCh. 4 - You work for a pharmaceutical company that has...Ch. 4 - Your oldest daughter is about to start...Ch. 4 - A rich aunt has promised you 5000 one year from...Ch. 4 - You are running a hot Internet company. Analysts...Ch. 4 - Prob. 31PCh. 4 - Prob. 32PCh. 4 - Prob. 33PCh. 4 - Prob. 34PCh. 4 - Prob. 35PCh. 4 - Prob. 36PCh. 4 - Prob. 37PCh. 4 - Prob. 38PCh. 4 - Prob. 39PCh. 4 - Prob. 40PCh. 4 - Prob. 41PCh. 4 - Prob. 42PCh. 4 - Prob. 43PCh. 4 - Prob. 44PCh. 4 - Prob. 45PCh. 4 - Prob. 46PCh. 4 - Prob. 47PCh. 4 - Prob. 48PCh. 4 - Prob. 49PCh. 4 - Prob. 50PCh. 4 - Prob. 51P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- You plan to retire in 7 years with $X. You plan to withdraw $54,100 per year for 15 years. The expected return is 13.19 percent per year and the first regular withdrawal is expected in 7 years. What is X? Input instructions: Round your answer to the nearest dollar. SAarrow_forwardYou plan to retire in 3 years with $911,880. You plan to withdraw $X per year for 18 years. The expected return is 18.56 percent per year and the first regular withdrawal is expected in 3 years. What is X? Input instructions: Round your answer to the nearest dollar. $ 59arrow_forwardYou just borrowed $203,584. You plan to repay this loan by making regular quarterly payments of X for 69 quarters and a special payment of $56,000 in 7 quarters. The interest rate on the loan is 1.94 percent per quarter and your first regular payment will be made today. What is X? Input instructions: Round your answer to the nearest dollar. $arrow_forward
- I got 1.62 but it's wrong why?arrow_forwardYou plan to retire in 8 years with $X. You plan to withdraw $114,200 per year for 21 years. The expected return is 17.92 percent per year and the first regular withdrawal is expected in 9 years. What is X? Input instructions: Round your answer to the nearest dollar. 69 $arrow_forwardHow much do you need in your account today if you expect to make quarterly withdrawals of $6,300 for 7 years and also make a special withdrawal of $25,700 in 7 years. The expected return for the account is 4.56 percent per quarter and the first regular withdrawal will be made today. Input instructions: Round your answer to the nearest dollar. $arrow_forward
- For EnPro, Please find the following values using the pdf (value line) provided . Please no excle. On Value Line: DPO = All Div'ds to Net Profit On Value Line: ROE = Return on Shr. Equity On Value Line: P/E = Avg Ann'l P/E ratio* r= _ Average DPO= _ Growth rate= _ Average P/E= _ 2026 EPS= _ 2027 EPS= _ 2028 EPS= _ 2026 dividend= _ 2027 dividend= _ 2028 dividend= _ 2028 price= _ 2028 total cash flow Intrinsic value= _arrow_forwardDon't used hand raitingarrow_forwardYou want to buy equipment that is available from 2 companies. The price of the equipment is the same for both companies. Gray Media would let you make quarterly payments of $14,000 for 6 years at an interest rate of 1.50 percent per quarter. Your first payment to Gray Media would be in 3 months. Island Media would let you make monthly payments of $X for 4 years at an interest rate of 1.35 percent per month. Your first payment to Island Media would be today. What is X? Input instructions: Round your answer to the nearest dollar. SA $arrow_forward
- You want to buy equipment that is available from 2 companies. The price of the equipment is the same for both companies. Gray Media would let you make quarterly payments of $1,430 for 7 years at an interest rate of 1.59 percent per quarter. Your first payment to Gray Media would be today. River Media would let you make monthly payments of $X for 8 years at an interest rate of 1.46 percent per month. Your first payment to River Media would be in 1 month. What is X? Input instructions: Round your answer to the nearest dollar. $arrow_forwardYou just borrowed $203,584. You plan to repay this loan by making regular quarterly payments of X for 69 quarters and a special payment of $56,000 in 7 quarters. The interest rate on the loan is 1.94 percent per quarter and your first regular payment will be made today. What is X? Input instructions: Round your answer to the nearest dollar. 59arrow_forwardYou plan to retire in 4 years with $698,670. You plan to withdraw $X per year for 17 years. The expected return is 17.95 percent per year and the first regular withdrawal is expected in 5 years. What is X? Input instructions: Round your answer to the nearest dollar. $arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial Reporting, Financial Statement Analysis...FinanceISBN:9781285190907Author:James M. Wahlen, Stephen P. Baginski, Mark BradshawPublisher:Cengage LearningPrinciples of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Financial Reporting, Financial Statement Analysis...
Finance
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College