The Perpetual Life Insurance Co. is trying to sell you an investment policy that will pay you
Question:
The Perpetual Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $12,000 per year forever. If the required return on this investment is 4.7 percent, how much will you pay for the policy? Suppose the Perpetual Life Insurance Co. told you the policy costs $275,000. At what interest rate would this be a fair deal?
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Related Book For 
Corporate Finance
ISBN: 978-0077861759
11th edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan
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