Question
Consider a perpetuity paying $2,000 a year. If the interest rate is 5 percent, what is the PV of the perpetuity? If the rate were
Consider a perpetuity paying $2,000 a year. If the interest rate is 5 percent, what is the PV of the perpetuity? If the rate were to increase would the value of the perpetuity increase or decrease? PV = CF/r
| A | $2,100.00 decrease |
| B | $40,000.00 decrease |
| C | $40,000.00 increase |
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Financial Derivatives A Blessing Or A Curse
Authors: Simon Grima, Eleftherios I. Thalassinos
1st Edition
1789732468, 9781789732467
