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supposed to touch water authority wanted to raise money by selling perpetuities of $111 per year...

supposed to touch water authority wanted to raise money by selling perpetuities of $111 per year with the first cash flow paid in one year from today if the appropriate discount rate is 6.6% what would you be willing to pay today for this perpetuity rounf to the nearest cent

Solutions

Expert Solution

Present Value of a perpetuity = Annual payment / Discount rate

Present Value of a perpetuity = $111 / 0.066

Present Value of a perpetuity = $1,681.82

jeff jeffy answered 2 years ago
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