You just won the lottery, which promises you $540,000 per year for the next 20 years,...

Question

Question

business finance

Answer 1

Answer #1

1.

present value=540000*((1-(1+8.25%)^(-20))/8.25%)

=5204600

2.

total value=4800+1200+3000+3000=12000

beta=(4800/12000)*0.90+(1200/12000)*1.10+(3000/12000)*1.25+(3000/12000)*1.60

=1.1825

3.

total value=7800+1200+3000+3000=15000

beta=(7800/15000)*0.90+(1200/15000)*1.10+(3000/15000)*1.25+(3000/15000)*1.60

=1.126

Answer 2

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