Question
What is the present value of a perpetual stream of cash flows that pays $5,500 at the end of year one and the annual cash
What is the present value of a perpetual stream of cash flows that pays $5,500 at the end of year one and the annual cash flows grow at a rate of 4% per year indefinitely, if the appropriate discount rate is 11%?
What if the appropriate discount rate is 9%?
a.If the appropriate discount rate is 11%, the present value of the growing perpetuity is $
(Round to the nearest cent.)
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Get StartedRecommended Textbook for
Public Finance A Contemporary Application of Theory to Policy
Authors: David N Hyman
11th edition
9781305474253, 1285173953, 1305474252, 978-1285173955
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