# Question: What is the present value of a perpetuity stream of

What is the present value of a perpetuity stream of cash flows that pays $1,000 at the end of Year 1, and the annual cash flows grow at a rate of 4 percent per year indefinitely, if the appropriate discount rate is 8 percent? What if the appropriate discount rate is 6 percent?

## Answer to relevant Questions

What is the present value of a perpetuity stream of cash flows that pays $50,000 at the end of Year 1 and then grows at a rate of 6 percent per year indefinitely? The rate of interest used to discount the cash flows is 10 ...How much do you have to deposit today so that beginning 11 years from now you can withdraw $10,000 a year for the next five years (Periods 11 through 15) plus an additional amount of $20,000 in the last year (Period 15)? ...Don Draper has signed a contract that will pay him $80,000 at the beginning of each year for the next six years, plus an additional $100,000 at the end of Year 6. If 8 percent is the appropriate discount rate, what is the ...From the following price data, compute the annual rates of return for Asman and Salinas.How would you interpret the meaning of the annual rates ofreturn?Answer the following questions using the information provided in Problem 8–3:In Problem 8–3, Mary Guilott recently graduated from college and is evaluating an investment in two companies’ common stock. She has ...Post your question