Present and Future Value Tables of $1 at 9% Are

question 2

Multiple Choice

Present and future value tables of $1 at 9% are presented below.

-An investment product promises to pay $42,000 at the end of 10 years. If an investor feels this investment should produce a rate of return of 12%, compounded annually, what's the most the investor should be willing to pay for the investment?

• A) $15,146.
• B) $13,523.
• C) $42,000.
• D) $130,446.

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Definitions:

Low Dividend Policy

A strategy where a company decides to distribute a smaller portion of its earnings in the form of dividends to retain more capital for growth.

Clienteles

Clienteles refers to groups of investors or customers who prefer certain policies or characteristics of a company, such as dividend policies, which cater to their specific needs or investment strategies.

Trading Range

Price range between the highest and lowest prices at which a stock is traded.

Dividend Yield

The ratio of a company's annual dividends to its current share price, represented as a percentage.