Answered

From tech troubles to travel tips, IDNLearn.com has answers to all your questions. Discover the information you need quickly and easily with our reliable and thorough Q&A platform.

Michael Bilkman has an opportunity to buy a perpetuity that pays $12,450 annually. His required rate of return on this investment is 13.25%. At what price would Michael be indifferent to buying or not buying the investment? Round off to the nearest $1.
Select one:

a.
$170,877

b.
$93,962

c.
$83,470

d.
$121,709

Sagot :

Kingpooh01idn

Answer:

$266,667.

Explanation:

P / (r-g) = Periodic payment / Interest rate - Growth rate

= 24,000 / (0.12 - 0.03)

= 24,000 / 0.09

= $266,667on:

i think thats it if i am wrong i am very sorry tellme if i am right or wrong.

We greatly appreciate every question and answer you provide. Keep engaging and finding the best solutions. This community is the perfect place to learn and grow together. Thank you for choosing IDNLearn.com. We’re dedicated to providing clear answers, so visit us again for more solutions.