What is the present value of a perpetuity of $10,000 per year if the appropriate discount rate
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What is the present value of a perpetuity of $10,000 per year if the appropriate discount rate is 5%? If interest rates in general were to double and the appropriate discount rate rose to 10%, what would happen to the present value of the perpetuity?
Discount RateDepending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal... Perpetuity
Perpetuity refers to payments that are made without an end or maturity date. A perpetuity is classified as an annuity, which is something that earns a dividend or receives a payment at a regularly scheduled interval, generally yearly. So, how...
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Related Book For 
Financial Management Theory And Practice
ISBN: 978-0176583057
3rd Canadian Edition
Authors: Eugene Brigham, Michael Ehrhardt, Jerome Gessaroli, Richard Nason
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