If we assume a perpetuity pays $10 per year forever. What would the perpetuity be worth...
If we assume a perpetuity pays $10 per year forever. What would the perpetuity be worth if the required rate of return is 10%?
$5
$100
$500
$1,000
Homework Answers
Value of Perpetuity = Annual Payment / Discount Rate
= $10 / 10%
Value of Perpetuity = $100
Option B is correct.
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