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Assignment On Concept Of Shareholder' Wealth Maximization

   

Added on  2020-02-24

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Assignment On Concept Of Shareholder' Wealth Maximization_1
Question 1a.Number of full payments required = 9Size of concluding 10th payment is $737.69WorkingsInvestmentnumberInvestment amountInterest earnedAccumulated investment01 800.00 - 800.00 2800.00 40.00 1,640.00 3 800.00 82.00 2,522.00 4 800.00 126.10 3,448.10 5 800.00 172.41 4,420.51 6 800.00 221.03 5,441.53 7 800.00 272.08 6,513.61 8 800.00 325.68 7,639.29 9 800.00 381.96 8,821.25 10 737.69 441.06 10,000.00 b.Size of equal monthly payments = $2708WorkingsLottery winning 200,000.00 Investment 180,000.00 Interest rate10%Interest earned in 4 years 72,000.00 Total amount receivable in equal payments 252,000.00 Monthly interest rate0.833%Number of payments180Size of monthly payments 2,708.00 -Number of paymentsTotal amount receivable in equal payments((1-(1+Monthly interest rate))=Size of monthly payments×Monthly interest ratec.Amount in December 2017 = $50.311.57Workings
Assignment On Concept Of Shareholder' Wealth Maximization_2
Yearly deposits since 2007 December 4,000.00 Interest rate5%Number of deposits10Amount remains on December 2017 50,311.57 Number of payments((1+ Interest rate)-1)Amount remain in December 2017=Yearly deposits×Interest rated.Present value of Mary’s future rights is $147201.74 and sale price of future rights is $150000.The sale price of rights is more than the present value of future rights hence it is suggested to Mary that she should sale her future rights for $150,000.WorkingsTotal amount receivable in equal payments 20,000.00 Interest rate6.000%Number of payments10Present value of future rights 147,201.74 e. Cost of annuity = $8244.22WorkingsTotal amount receivable in equal payments 1,000.00 Growth rate10.00%Number of payments10Interest rate12%YearAnnual investmentPresent value of investment11,000.00892.8621,100.00876.9131,210.00861.2541,331.00845.8751,464.10830.7761,610.51815.9371,771.56801.3681,948.72787.0592,143.59773.00
Assignment On Concept Of Shareholder' Wealth Maximization_3
102,357.95759.20cost of the annuity8,244.22Question 21.Shareholder’s wealth refers to the present value of organization’s wealth that willappropriate to shareholder either in form of dividends or in form of capital receipt onstock sell. The concept of Shareholder’s wealth maximization related to the worth ofentity. Shareholder’s wealth maximization is objective towards the increase in thevalue of an investment of shareholder [ CITATION Aue79 \l 1033 ]. Shareholder’swealth concept considers risk and uncertainty involved in the investments made byshareholder and time involved from the purchase of investment made by ashareholder to the sale of investment made by the shareholder. This concept put thefocus on achievement of long term objectives. This concept provides strength to the
Assignment On Concept Of Shareholder' Wealth Maximization_4

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