Complete · 30 Days108 / 188
EasyFinanceAcceptance 61%
Perpetuity Value
Goldman SachsJ.P. Morgan
A perpetuity pays $10 every year forever. With a discount rate of 5%, what is its present value?
Approach
PV of a level perpetuity is cash flow ÷ rate.
Answer
Show the final answer
The answer is 200. Sign in free for the full worked solution and to check your own answer.
Related problems
Put-Call ParityEasyBlack-Scholes ATM CallMediumRisk-Neutral ProbabilityMediumZero-Coupon Bond PriceEasyFutures Fair ValueEasyDuration & Price SensitivityEasy
More in Finance.