Find the single percentage discount which is equivalent to a discount of 20% followed by a 30% discount.
If your answer is 10%, enter 10.
Approximately how much do you have to place in a bank which pays 1% interest per annum (compounded annually), so that you will have $100 in it in 10 years?
You own a bond that will pay 10% per year for the next 10 years, on a principal of $1000. The prevailing discount rate is 10% throughout.
What is the bond worth now?
The discount rate is the interest rate that is used in discounted cash flow analysis.
A 5 year, 5% coupon $1000 corporate bond yielding 5% is currently trading for $995. What trade would you want to execute?
Note: Ignore transaction costs and interest rates.
You want to value stock dividends that are projected to grow forever at a constant rate , using a discount rate of . If the dividend in the first period is , what is the value of this cash flow?
Assume that .