1)The preferred stock of General Motors pays a dividend of $2 every quarter. The appropriate...
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Finance
1)The preferred stock of General Motors pays a dividend of $2 every quarter. The appropriate discount rate is 6% per quarter
If you expect to receive the $2 every quarter, starting one quarter from now, for exactly 7 years and nothing thereafter, what is the present value of the preferred stock?
2)You want to borrow $600,000 from your bank to buy a business. The loan has an annual interest rate of 5% and calls for equal annual payments over 10 years (starting one year from now), after which the loan is paid back in full.
What is the annual payment you have to make?
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