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Accounting
3. 4: Time Value of Money: Perpetuities
Click here to read the eBook: Future Values
Time Value of Money: Perpetuities
An annuity that goes on indefinitely is called a perpetuity. The payments of a perpetuity constitute a/an -Select-finiteinfiniteCorrect 1 of Item 1 series. The equation is:
A -Select-preferredcommonCorrect 2 of Item 1 stock with no maturity is an example of a perpetuity.
Quantitative Problem: You own a security that provides an annual dividend of $170 forever. The securitys annual return is 6%. What is the present value of this security? Round your answer to the nearest cent. $
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