Maximum Period 2 Consumption Assignment
February 20th, 2020
A firm decides to pay total dividends of $100,000 in period 1 and $471,000 in period 2. Charlie owns 10% of the firm and has no other wealth or income. What is Charlie’s maximum period 2 consumption (C2) if he plans to consume only $1,000 in period 1 (C1)?
The market rate of return is 10%.
$47,100 | ||
$52,819 | ||
$50,810 | ||
$57,000 | ||
$58,100 |
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