Question
You have just read an advertisement stating, Pay us $100 for 10 years and we will pay you $100 a year thereafter in perpetuity. If
You have just read an advertisement stating, "Pay us $100 for 10 years and we will pay you $100 a year thereafter in perpetuity." If this is a fair deal (NPV=0), what is the rate of interest?
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Financial Management Principles and Application
Authors: Arthur J. Keown, J. William Petty, David F. Scott, Jr.
10th edition
536514119, 536514110, 978-0536514110
