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Answer is 17850 Two growing perpetuities, each with annual payments, have the same yield rate (i.e., the same interest rate applies to both). The first
Answer is 17850
Two growing perpetuities, each with annual payments, have the same yield rate (i.e., the same interest rate applies to both). The first perpetuity has an initial payment of $500 one year from now, and each subsequent annual payment increases by $100. The present value of this first perpetuity is $19,500. The second perpetuity is a perpetuity-due and has an initial payment of $750 now, and each subsequent annual payment increases by 4%. Find the present value, now, of the second perpetuityStep by Step Solution
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