Present Value of 1 Future Value of 1

question 28

True/False

Present Value of 1 Future Value of 1 Present Value of an Annuity of 1 Future Value of an Annuity of 1 The present value of $2,000 to be received nine years from today at 8% interest compounded annually is $1,000.
Present Value = Future Value * Interest Factor for 9 years @8%
Present Value = $2,000 * 0.5002 = $1,000

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Definitions:

Cash Dividend

A payment made by a company out of its profits to shareholders, usually in the form of cash.

No-Par Stock

No-Par Stock is a class of shares which does not have a nominal or face value assigned to them, meaning the value of the shares is determined by the amount investors are willing to pay for them in the market.

Common Stock

A type of equity security that represents ownership in a corporation, with voting rights and potential for dividends.

Stock At A Premium

Stock at a premium refers to shares that are sold for a price higher than their par value, often reflecting the issuing company's perceived value and growth prospects.