Explain the importance of present value of


1. Sunrise Inc. expects to pay its next annual dividend of $2 a share. The firm recently announced that all future dividends will be increased by 4% annually. What is one share of this stock worth to you if you require a 11% rate of return?

2. Explain the importance of "present value of money".

3. What is the present value of $110 one year from now if you can get an annual risk free interest rate of 5%? Show your work.

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Financial Management: Explain the importance of present value of
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