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    themoxroxmysox's Avatar
    themoxroxmysox Posts: 3, Reputation: 1
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    #1

    Apr 26, 2009, 01:16 PM
    Market Value
    I really need some help with this problem. I feel like I'm doing everything right, but am not getting the answer I am supposed to (since the professor gave out the answers but not how to get there. I'm going crazy over this! It's due tonight and I have been working on it (as well as the others in the set) for days! Help please!

    The answer is supposed to be 95.4159

    This is what I have:

    market value=
    D0= $3.00
    D1= $3.00(1+g)= $3.00(1.25)= $3.75
    D2= $3.00(1+g)2= $3.00(1.25)2= $4.68
    D3= $3.00(1+g)3= $3.00(1.25)3= $5.86
    D4= $3.00(1+g)3(1+g)= $3.00(1.25)3(1.10)= $6.45

    P3= $6.45/(0.15-0.10)= $6.45/0.05=$129.00

    Po=$3.75/(1.15) + $4.68/(1.15)2 + $5.86/(1.15)3 + ($5.86 + $129.00)/(1.15)4
    =$3.75(0.8696) + $4.68(0.7561) + $5.86(0.6575) + $134.86(0.5781)
    =3.2610 + 5.4361 + 6.5175 + 77.1129
    = 92.33


    Thanks
    Zazonker's Avatar
    Zazonker Posts: 126, Reputation: 19
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    #2

    Apr 26, 2009, 03:23 PM
    Well, since no one else has answered you yet -- I'm not familiar with the formula that you are trying to use, but I'm reasonably good at math in general. If you want to post the formula, I'd be happy to go over what you are doing and see if I can find an error.
    themoxroxmysox's Avatar
    themoxroxmysox Posts: 3, Reputation: 1
    New Member
     
    #3

    Apr 26, 2009, 03:59 PM
    Thank you so much for offering, but unfortunately I don't have a formula per se, but only examples of how such problems are done, which I have followed. It is so complicated. I'm sorry (for myself as well) that I can't give you an exact formula so that you might be able to help me.

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