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13) A perpetuity that pays $125 at the end of each year costs $625 today. a) What is the implied rate of return on this

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13) A perpetuity that pays $125 at the end of each year costs $625 today. a) What is the implied rate of return on this investment? b) If the payments of the perpetuity were made at the beginning of each year, what is the implied rate of return on this investment? ha Krishnaswami Lecture Notes Page 2 of 4

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