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Consider an investment that will pay us $ 5 0 per year for eternity. If our required return is 8 % , what is the
Consider an investment that will pay us $ per year for eternity. If our required return is what is the value of this investment?
Hint:
Suppose we were to buy an investment for $ that paid us per year in perpetuity, what would you expect to receive each year?
Hint: PV
What is the future value of $ in years assuming an interest rate of compounded monthly?
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