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What is the present value of a perpetual stream of semi-annual cash flows of $200 each? Assume an interest rate of 15% APR compounded annually.
What is the present value of a perpetual stream of semi-annual cash flows of $200 each? Assume an interest rate of 15% APR compounded annually.
a) $2,146
b) $2,472
c) $2,763
d) $3,034
(CLOSEST ANSWER) Hint: 1) Convert the 10% APR compounded annually into APR compounded semi-annually 2) PV = PMT/(i/n)
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