Question
You are evaluating a growing perpetuity product from a large financial services firm. The product promises an initial payment of $25,000 at the end of
You are evaluating a growing perpetuity product from a large financial services firm. The product promises an initial payment of $25,000 at the end of this year and subsequent payments that will thereafter grow at a rate of 0.02 annually. If you use adiscount rate of 0.09 for investment products, what is the present value of this growing perpetuity? Round to two decimal places.
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Modern Portfolio Theory and Investment Analysis
Authors: Edwin Elton, Martin Gruber, Stephen Brown, William Goetzmann
9th edition
9781118805800, 1118469941, 1118805801, 978-1118469941
