Question
An n year deferred perpetuity immediate pays 10,000 annually. The present value for the perpetuity is 951,465.6876. Just after the second payment from the perpetuity
An n year deferred perpetuity immediate pays 10,000 annually. The present value for the perpetuity is 951,465.6876. Just after the second payment from the perpetuity is made, the perpetuity is exchanged for an n year annuity immediate that pays X annually. Assuming the present values for the perpetuity and the annuity are calculated based on an annual eective interest rate of 1%, nd X.
4. (10 points) Ann year deferred perpetuity immediate pays 10,000 annually. The present value for the perpetuity is 951,465.6876. Just after the second payment from the perpetuity is made, the perpetuity is exchanged for an n year annuity immediate that pays X annually. Assuming the present values for the perpetuity and the annuity are calculated based on an annual effective interest rate of 1%, find X.
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Entrepreneurial Finance
Authors: J . chris leach, Ronald w. melicher
4th edition
538478152, 978-0538478151
