13)
Present value of perpetuity:
= Annual cash flow/Interest rate
= $2,800/5%
= $56,000
Hence, correct option is d. $56,000
13. What is the present value of a perpetuity that pays $2800 each year? Assume the interest rate is 5% a. $25,200 b. $28,000 c. $39,600 d. $56,000 e. $64,800 14. A company is paying annual dividends...
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