Corporate Finance
Corporate Finance
3rd Edition
ISBN: 9780132992473
Author: Jonathan Berk, Peter DeMarzo
Publisher: Prentice Hall
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Chapter 9, Problem 24P
Summary Introduction

To determine: The value of the share.

Introduction:

Stock valuation of a constant growth: It is a method of calculating a company’s stock value; the valuation of a stock can be done based on the present value of the future cash flow or earnings on a constant growth.

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1. Find the future value if $1,250 is invested in Simple interest account paying 6.5%:  a. for  5 years  b. for 20 years                                       2. Find the future amount $ 35,000 is invested for 30 years at 4.25% compounded: a. annually b. Quarterly  c. monthly d. weekly                                                                                                                                                                                                                                                                         3. How much should be put into an account today that pays 7.75% compounded monthly if you need $10,000 in 5 years.                  4. Find the effective rate for: a. 5.75% compounded quarterly b. 6.25% compounded daily.                                                                                 5. $50 is invested at the end of each month into an account paying 7.5% compounded monthly. How much will be in the account after 5 years?…
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