What Is the Present Value (PV)of $100,000 Received Five Years

question 42

Multiple Choice

What is the present value (PV) of $100,000 received five years from now,assuming the interest rate is 8% per year?

• A)$60,000.00
• B)$68,058.32
• C)$73,502.99
• D)$82,609.42

---

Definitions:

Dividend Growth Rate

The annualized percentage rate of growth of a company’s dividend payout, indicating the stability and growth prospects of the company to investors.

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary based on income levels, types of income, and other factors.

Cost of Equity

Represents the compensation the market requires to own equity in a company, reflecting the risk perceived by investors in holding that company's stocks.

Dividends

Disbursements issued by a company to its shareholders, apportioning some of the firm's profits among them.