Valuing Unequal Payment Streams

Flow-by-flow valuation worked

Two-stage streams and terminal values

Irregular savings patterns

Uneven dividends and the bridge forward

A promise pays 1,000 dollars in year one, 2,000 in year two, and 3,000 in year three at 10 percent. What is its present value?

A firm pays individually forecast dividends for five years, then is expected to grow dividends at a constant rate forever. How is its stock value constructed?

Why does the terminal value often account for 70 to 80 percent of a two-stage valuation?

A saver deposits 2,000 dollars today, 3,000 in one year, and 1,500 in two years, earning 6 percent. What is the fund worth at the end of year two?

Why is the flow-by-flow method better suited to dividend valuation than the annuity formula?

A project forecasts construction outlays for two years, then operating inflows for eight, then a closure cost. How does the general method handle this mix?

At the horizon, the endless tail is priced as a growing perpetuity, first tail flow divided by what spread? Answer with three characters including the minus sign.

What five-letter spreadsheet function computes net present value by discounting an entered list of dated flows at one rate? Write the function name.

In two-stage valuation, what two-word term names the individually forecast years before the terminal value takes over? Answer in lowercase.

What three-word payment-stream pattern, level payments for a fixed term, does the general method reduce to when all flows happen to be equal? Answer in lowercase.