what is the present value of a perpetuity that pays $8.50 per year forever (at the...

what is the present value of a perpetuity that pays $8.50 per year forever (at the end of every year) if the appropriate discount rate is 7%

Solutions

Expert Solution

Present Value of Perpetuity = Annual Payment/Discount Rate

Here,

Annual Payment = $8.50

Discount Rate = 7%

Present Value = 8.50/0.07

Present Value = $121.43

jeff jeffy answered 1 year ago

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