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Assume that a perpetuity pays $100 per year at an interest rate of 8%; the present value of the perpetuity is? PV = $100
Assume that a perpetuity pays $100 per year at an interest rate of 8%; the present value of the perpetuity is? PV = $100 / 0.08 = $1,250 PV = $100 x 1.08 = $108 C = $1000/0.08 = $12,500 C = $100 0.08 = $108 There is not enough information to calculate the answer
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
13th International Edition
1265533199, 978-1265533199
