Question
In: Finance
Given a discount rate of 13 percent, what is the present value of a perpetuity of...
Given a discount rate of 13 percent, what is the present value of a perpetuity of $1,400 per year if the first payment does not begin until the end of year 10?
Solutions
Expert Solution
Present value today = Perpetuity / Rate = $1,400 / 0.13 = $10,769.23
Present value = $10,769.23 / (1 + 0.13)^10
Present value = $3,172.49
jeff jeffy answered 2 years agoRelated Solutions
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