A financial institution invests £74857 into a scheme of company shares. It is expected that the scheme will return a net dividend payable continuously in exactly 19 months from the time of the investment. After this initial delay, the dividends will amount to £15179 per year for the first 6 years and of £1352 per month for the remaining 6 years until the shares will be sold on for £6886. Assuming a nominal rate of interest of 5.4% pa convertible monthly is applicable for the entire period, calculate the net present value of this investment in £s to 2 decimal places.

A financial institution invests £74857 into a scheme of company shares. It is expected that the scheme will return a net dividend payable continuously in exactly 19 months from the time of the investment. After this initial delay, the dividends will amount to £15179 per year for the first 6 years and of £1352 per month for the remaining 6 years until the shares will be sold on for £6886. Assuming a nominal rate of interest of 5.4% pa convertible monthly is applicable for the entire period, calculate the net present value of this investment in £s to 2 decimal places.

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Description: A financial institution invests £74857 into a scheme of company shares. It is expected that the scheme willreturn a net dividend payable continuously in exactly 19 months from the time of the investment. Afterthis initial delay, the dividends will a

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter7: Common Stock: Characteristics, Valuation, And Issuance

Section: Chapter Questions

Problem 8P

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