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Assume that you are at Year 0 and are looking at two possible investments , both of which have a nominal annual required rate of
Assume that you are at Year and are looking at two possible investments both of which have a nominal annual required rate of return of percent Investment A will pay a perpetual cash flow stream of $ dollars starting at Year and going through infinity Investment B will pay a cash flow of $ at Year but this cash flow will then grow at a constant growth rate of percent every year thereafter Year $ x etc. through infinity Given this information determine the difference between what you would pay for Investment B at Year and what you would pay for Investment A at Year O $ $ $ $ $
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