Question
Assume that the perpetuity pays $100 per year at an interest rate of 8%; the present value of the perpetuity is _______. PV = $100/0.08
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Assume that the 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 = $100 x 0.08 = $8
C = $100/1.08 = $92.59
There is not enough information to calculate the answer.
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Fundamentals Of Futures And Options Markets
Authors: John C. Hull
8th Global Edition
1292155035, 9781292155036
