Part 1 (Present value of a growing perpetuity) What is the present value of a perpetual stream of cash flows that pays $40,000 at the end of year one and then grows at a rate of 3% per year indefinitely? The rate of interest used to discount the cash flows is 12%. Question content area bottom Part 1 The present value of the growing perpetuity is $enter your response here. (Round to the nearest cent.)
Part 1 (Present value of a growing perpetuity) What is the present value of a perpetual stream of cash flows that pays $40,000 at the end of year one and then grows at a rate of 3% per year indefinitely? The rate of interest used to discount the cash flows is 12%. Question content area bottom Part 1 The present value of the growing perpetuity is $enter your response here. (Round to the nearest cent.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question content area top
Part 1
(Present value of a growing perpetuity) What is the present value of a perpetual stream of cash flows that pays
$40,000
at the end of year one and then grows at a rate of
3%
per year indefinitely? The rate of interest used to discount the cash flows is
12%.
Question content area bottom
Part 1
The present value of the growing perpetuity is
$enter your response here.
(Round to the nearest cent.)Expert Solution
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