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Suppose that you have inherited a perpetuity that will pay $1000 three years from now. Following...

Suppose that you have inherited a perpetuity that will pay $1000 three years from now. Following the initial payment it will make a payment every two years that is 5% larger than the prior payment. Assuming that the annual opportunity cost of capital is 10%, What is the value of this perpetuity today? Round your final answer to two decimals.

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Answer #1

Value of perpetuity FVx(1=(1+r)^n) Here, 10% 3 A Rate per annum B Number of years C Number of compoundings per per annum A:C

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