7) When you retire, you expect to live for another 30 years. During those 30 yea

Question

7) When you retire, you expect to live for another 30 years. During those 30 years, you want to get $4,000 per month at the beginning of every month for living expenses. How much money do you need to have when you retire? Assume 8% rate of return on your savings? 8) Miller juice just paid $3 dividend. The company is expected to pay $3.50 dividend next year and $4 in two-years. After that dividends will grow at 5% forever. If investors want a 12% return on Miller stock, what should be the current stock price of Miller? (2-stage model) 9) Today you have purchased a $1000 PAR bond with 5% coupon, and 10-years maturity for S845. How much capital gains tax will you pay on this bond next year if capital gains tax is 15%?

Explanation / Answer

7)

you need to have on retirement

=(4000*(((1-(1+(8%/12))^(-30*12))/(8%/12)))*(1+(8%/12)))

=548768.20

the above is the answer

we do only one question based on Chegg rule.

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