You get C0 = $5 today, and next month you will receive a payment of C1 =
Question:
You get C0
= $5 today, and next month you will receive a payment of C1
= (1 + g) . C0
= 1.001 . $5 =
$5.005. The growing perpetuity is worth PV = C1/(r − g) = $5.005/(0.5% − 0.1%) = $1,251.25. The total value is $1,256.25.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Question Posted: