Perpetuities

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What is a perpetuity? It is an annuity that has no end point
What is an example of a perpetuity? A fixed coupon payment on permanently invested sum of money
What is the PV (today) of a perpetuity if next year’s cashflow is expected to be $2,398 and the discount rate is constant at 12%? PV = 2398/0.12 = $19,983.33

What is a perpetuity?

What is an example of a perpetuity?

What is the PV (today) of a perpetuity if next year’s cashflow is expected to be $2,398 and the discount rate is constant at 12%?

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