20 May HOW MUCH WOULD HE NEED IN THE BANK 10 YEARS FROM NOW TO BE ABLE TO DO THIS?
What is the value of 15-year corporate bonds, with a coupon rate of 9%, if current interest rates on similar bonds is 8%? How much would the value change if interest rates increased to 10%? Under what conditions will this bond trade at par (face value)?
2. What is the value of stock in a company that currently pays out $1.50 per share in dividends and expects these dividends to grow 6% a year forever? (You can assume that investors require a 13% return on stocks of equivalent risk.)
3. You buy a 10-year zero-coupon bond, with a face value of $1000, for $300. What is the rate of return you will make on this bond?
4. You have an expected liability (cash outflow) of $500,000 in 10 years, and you use a discount rate of 10%.
a. How much would you need right now as savings to cover the expected liability?
b. How much would you need to set aside at the end of each year for the next 10 years to cover the expected liability?
5. You are an investment advisor who has been approached by a client for help on his financial strategy. He has $250,000 in savings in the bank. He is 55 years old and expects to work for 10 more years, making $100,000 a year. (He expects to make a return of 5% on his investments for the foreseeable future. You can ignore taxes)
a. Once he retires 10 years from now, he would like to be able to withdraw $80,000 a year for the following 25 years (his actuary tells him he will live to be ninety years old.). How much would he need in the bank 10 years from now to be able to do this?
b. How much of his income would he need to save each year for the next 10 years to be able to afford these planned withdrawals ($80,000 a year) after the tenth year?
c. Assume that interest rates decline to 4% 10 years from now. How much, if any, would you client have to lower his annual withdrawal by, assuming that he still plans to withdraw cash each year for the next 25 years?
Buy Answer
Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.
About Writedemy
We are a professional paper writing website. If you have searched a question and bumped into our website just know you are in the right place to get help in your coursework. We offer HIGH QUALITY & PLAGIARISM FREE Papers.
How It Works
To make an Order you only need to click on “Order Now” and we will direct you to our Order Page. Fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.
Are there Discounts?
All new clients are eligible for 20% off in their first Order. Our payment method is safe and secure.