Consider an investment that pays $17.17 every year forever. This firm does not intend to grow...
Consider an investment that pays $17.17 every year forever. This firm does not intend to grow and has an interest rate (required rate of return) of 8%. What is the present value of this investment opportunity? Give answers to two decimals.
Homework Answers
This is an example of perpetuity
PV of perpetuity is mathematically represented as:
PV = $17.17/8% = $214.63
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Consider an investment that pays $17.17 every year forever. This
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