Question
A financial product pays $100 at the end of year 1, $200 at the end of year 2. Starting in year 3, the payments grow
A financial product pays $100 at the end of year 1, $200 at the end of year 2. Starting in year 3, the payments grow at a constant rate of 5% (of the previous payment) and last forever. If the discount rate is 8.7%, what is the price of this product?
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Theoretical Foundations For Quantitative Finance
Authors: Luca Spadafora, Gennady P Berman
1st Edition
9813202475, 978-9813202474
