A fianncial security generates a cash flow of 2 million every five years forever with the first cash flow occuring in two years' time.The appropriate opportunity cost is 10% p.a. compounded annually.What should be the security's price today?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 27P
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A fianncial security generates a cash flow of 2 million every five years forever with the first cash flow occuring in two years' time.The appropriate opportunity cost is 10% p.a. compounded annually.What should be the security's price today?

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