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Problem 1: Contract 1: You will receive $100,000 in 6 years and you will continue...

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Problem 1: Contract 1: You will receive $100,000 in 6 years and you will continue to roccive money overy 2 years until year 30 but the amount is growing at a constant rate of 3% each period. The interest rate is 8% APR quarterly compounded. What is the present valuc? Contract 2: A bank offers to pay $90.000 today and it will continue to pay every 3 years forever, but the umount is growing at a constant rate of 2% every three years (So, the first payment is at year 4, and the payment will continue every two years growing at a rate of 2% per two years and so forever) The interest rate is 12% semi-annually compounded. What is the present value? Which contract is better? Question: Usually, do firms issue stocks and bonds by themselves? Why? Explain

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