7a

b. What if the approriate discount rate is 6%?

(Related to Checkpoint 6.5) (Present value of a growing perpetuity) What is the present value of a perpetual stream of cash flows that pays $4,500 at the end of year one and the annual cash flows grow at a rate of 2% per year indefinitely. If the appropriate discount rate is 8%? What if the appropriate discount rate is 6%? a. If the appropriate discount rate is 8%, the present value of the growing perpetuity is $ (Round to the nearest cent)