An annuity that goes on indefinitely is called a perpetuity


Time Value of Money: Perpetuities

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-preferred common Correct 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 security’s annual return is 6%. What is the present value of this security? Round your answer to the nearest cent. $

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Financial Management: An annuity that goes on indefinitely is called a perpetuity
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