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Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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What type of model is this showing?

FVs
D
CF=D+P
value
1
3.1
3.1
$62.97 npv(RR,list of FVs)
2
3.1
3.1
3.1
3.1
3.1
81
84.1
price quote
$70
value today = sum of PV of FVs
%3D
RR
11%
Buy/Sell/Hold?
SELL
t
D
CF
NPV
$75.75
1
25
$
25.0000
2
15
$
15.0000
quote
$
70.00
3
6.6
$
6.6000
buy/sell/hold?
4
3.1
54.76666667 $
57.8667 P4 = D5 / (RR - g)
3.286
long g
6%
D5 = D4 * (1+g)
RR
12%
Transcribed Image Text:FVs D CF=D+P value 1 3.1 3.1 $62.97 npv(RR,list of FVs) 2 3.1 3.1 3.1 3.1 3.1 81 84.1 price quote $70 value today = sum of PV of FVs %3D RR 11% Buy/Sell/Hold? SELL t D CF NPV $75.75 1 25 $ 25.0000 2 15 $ 15.0000 quote $ 70.00 3 6.6 $ 6.6000 buy/sell/hold? 4 3.1 54.76666667 $ 57.8667 P4 = D5 / (RR - g) 3.286 long g 6% D5 = D4 * (1+g) RR 12%
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