Cash Flow

End of Main Chapter Problems

Q 3.25 A tall Starbucks coffee costs 1.65 a day. If the bank's quoted interest rate is 6 per annum, compounded daily, and if the Starbucks price never changed, what would an endless, inheritable free subscription to Starbucks coffee be worth today Q 3.26 If you could pay for your mortgage forever, how much would you have to pay per month for a 1,000,000 mortgage, at a 6.5 annual interest rate Work out an answer change if the 6.5 is a bank quote and one if it is a true interest rate Q 3.27 What...

End of Chapter Problems

Q 2.43 What is a perfect market What were the assumptions made in this chapter that were not part of the perfect market scenario Q 2.44 What is the difference between a bond and a loan Q 2.45 In the text, I assumed you received the dividend at the end of the period. In the real world, if you received the dividend at the beginning of the period instead of the end of the period, could this change your effective rate of return Why Q2.46 Your stock costs 100 today, pays 5 in dividends, and then...