Answer to Question #222624 in Finance for De prince polymath

Question #222624
As a prospective share holder, you are offered a project that will pay you an income of #8000 in 5years time at 13% rate of discount. What is the present value your future dividend.
1
Expert's answer
2021-08-03T13:28:51-0400

Solution:

Given, "FV=8000,i=13\\%=0.13,n=5"

"i+1=(\\dfrac{FV}{PV})^{1\/n}"

Putting given values:

"0.13+1=(\\dfrac{8000}{PV})^{1\/5}\n\\\\\\Rightarrow 1.13^5=\\dfrac{8000}{PV}\n\\\\\\Rightarrow PV=4342.79"


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